13 Bad Habits That Could Be Sabotaging Your Retirement Goals

Avoiding these common mistakes can help you reach your financial retirement goals.
Updated May 1, 2024
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You probably know that saving for retirement is necessary. Being financially prepared for the day you can no longer work now can save you a lot of stress when the day finally comes.

You'll want to avoid some common mistakes many retirees make that can sabotage your retirement goals. Fortunately, it’s never too late to start making smart financial decisions.

Here are 13 bad habits you should avoid that could be derailing your retirement goals.

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Not saving for retirement

bongkarn/Adobe uncertain and confused 60s aged asian woman

If you’re a W2 employee, your employer might offer to match a percentage of your 401(k) contributions. However, most employers will place a cap on how much they’re willing to match.

If possible, you should invest an amount that results in the largest employer contribution. After all, it’s free money for you.

If you’re self-employed, you’ll need to set aside money for retirement on your own, without any matching contributions from an employer. Determine what amount you can allocate each month to your retirement fund and stick to it.

Not saving enough

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There are many factors that determine the amount you should save to live comfortably after retirement. The age you retire, your cost of living, and inflation all influence how much money you’ll need in your retirement account.

It’s impossible to know for certain how many years you’ll spend in retirement. Not everyone retires at age 67, and no one knows how long they’ll live.

Most financial experts suggest saving enough to live out retirement with 70% to 80% of your pre-retirement income.

No long-term investments

Prostock-studio/Adobe man holding phone working on laptop on floor

Investing in real estate can help you live a more comfortable retirement. If you own your home, you’ve already made one long-term investment. Many retirees also look to renting out properties of their own for additional income.

Making the investments now will allow you to sell or rent properties should you ever need or want to. Owning real estate is also a smart move since rental costs can increase during your retirement, resulting in extra expenses you didn’t plan for.

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Too much debt

SB Arts Media/Adobe man managing finances feeling desperate

If you don’t want debt to follow you into retirement, it’s important to find ways to crush it now.

Interest rates will continue accruing, so paying off high-interest credit cards and loans will leave you with more money to save for your retirement.

If you’re living on a fixed income, you don’t want to spend money paying off interest. Going into retirement with little to no debt will provide you with more money for necessary expenses.

Relying on social security

zinkevych/Adobe joyful pensioner keeping smile on her face while checking documents

The Social Security Administration estimates that most retirees will only receive 40% of their pre-retirement income through Social Security. That’s only about half of the recommended amount.

While Social Security payments help, they give you enough money to live out your life comfortably. As a result, you may need to look for creative ways to supplement your Social Security.

You can estimate your monthly benefits with a My Social Security account, whether you’re close to retiring or not.

Not working enough

motortion/Adobe elderly man sleeping on couch with book in hands

Each year, you can earn up to four Social Security credits. You need at least 40 total credits before you’re eligible to receive benefits.

If you don’t reach the required number of credits in your lifetime, you won’t receive any benefits at all.

Your lifetime earnings amount will also influence your Social Security payments. The more money you make now, the higher your monthly benefit amount when you retire.

Not reporting all income

Anton/Adobe cheerful senior woman raises her hands and holds money

Not everyone is obligated to report income. If you make less than a certain amount, you might decide not to file.

Even those who are required to report often don’t claim all of their income. This can happen when workers are paid in cash and don’t want to pay taxes.

Only reported income counts toward your Social Security credits and earnings. Not reporting income to the IRS can result in reduced or no Social Security benefits when you retire.

Legal implications aside, it’s worth reporting all of your earnings and paying your taxes.

Not negotiating pay increases

Antonioguillem/Adobe salesman trying to convince a bored client

A higher salary means you can save more money for retirement. If your employer is matching a certain percentage of your income, you can receive more in contributions from them.

Your higher income will also count toward your Social Security credits and earnings. This will increase your monthly Social Security retirement benefit amount. Negotiating a raise puts more money in your pocket now and in the future.

Borrowing from your 401(k)

Monkey Business/Adobe depressed senior man looking unhappy sitting on side of bed

Withdrawing from your 401(k) is tempting if you need funds, but it will hurt you financially.

There’s a penalty for withdrawing funds before age 59, and the amount you withdraw is treated as taxable income. Withdrawing funds from a regular savings account is a better financial move.

Making the wrong investments

Rido/Adobe Bad investment

Making good investments is a smart move, but making the wrong ones can sabotage your retirement goals.

Good investments will provide financial returns in the future. Bad ones can cause you to lose your money.

Doing your homework before investing can help you make the best investments. Hiring a financial advisor can also help you make wise investing decisions.

Not planning for the unexpected

josemiguelsangar/Adobe sick man surprised by the high temperature of the thermometer

Unexpected events like health problems can impact your financial future. Things can happen without notice that might force you to retire early, require extra care, or even require you to move into an assisted living facility.

Financially planning for these unexpected events will help ensure you have the money to cover any problems that arise.

Providing for adult children

NVB Stocker/Adobe old father and happy son sitting on sofa using laptop

You might feel like you should be paying for your child’s college education or living costs while they’re attending school. But this will reduce how much you can save for your retirement.

You might spend the next decade repaying student loan debts for your adult children. This can leave you without enough money to live out the rest of your life comfortably.

Additional costs your retirement does not cover are likely to fall back on your children later. Preparing for your own future now can help you both in the long run.


khosrork/Adobe man with beard wearing white T-shirt showing empty pockets

If you recently received a raise or bonus, investing the extra money in your future is a wise decision.

There might come a day before you reach retirement age when you can no longer work. Putting that extra money away now will make your future more financially secure.

Living comfortably when you can no longer pick up those extra shifts is not easy when you become accustomed to a higher cost-of-living lifestyle.

Bottom line

Jacob Lund/Adobe journaling during retirement

The U.S. Census Bureau states that nearly half of Americans don’t have any personal retirement savings by age 66. Fortunately, reaching your retirement goals is possible if you make the right decisions now.

Avoiding these common mistakes can help you avoid throwing your money away before you retire.

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Author Details

Katelyn Washington Katelyn Washington is a writer with a passion for finance and business. She put herself through business school as a single mother of three and has had pieces commissioned by national magazines. When she’s not writing, she enjoys spending time with her family and editing manuscripts for indie authors.

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