Retirement Retirement Planning

9 Costly 401(k) Mistakes People Make in Their 70s (And the Price They Pay)

Common 401(k) missteps in your 70s can quietly erode your savings.

By Chris Lewis, CEPF , Edited by Laura Hohenstein

Updated May 17, 2026

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Your 70s can be a rewarding stage of retirement, but they also come with new financial rules and pressures. Retirees may avoid money mistakes earlier in life, only to make costly ones once required withdrawals and health care costs come into play. Decisions around 401(k)s can become more consequential as income sources narrow and tax consequences grow. Understanding these common pitfalls can help retirees protect their savings and maintain flexibility.

Here are some of the most expensive 401(k) mistakes people make in their 70s and why they matter.

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Not taking required minimum distributions when you're supposed to

Required minimum distributions, or RMDs, are mandatory withdrawals from most tax-deferred retirement accounts once you reach age 73. Traditional 401(k)s, IRAs, SEP IRAs, and SIMPLE IRAs are all subject to these rules.

Failing to take the correct amount on time can trigger a penalty equal to 25% of the missed withdrawal. Even partial miscalculations can create unnecessary tax headaches later.

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Neglecting to coordinate withdrawals with Social Security

Starting Social Security without coordinating it with a broader withdrawal strategy can lead to unnecessary tax exposure. Because Social Security benefits are based on your earnings throughout the years, claiming too soon may lock in a lower payment and increase the need to draw more money from retirement accounts later on.

Taking a coordinated approach to annual withdrawals and postponing Social Security when possible can help preserve income over time.

Not considering the cost of Medicare and health insurance premiums

Large 401(k) withdrawals can raise Medicare premiums through income-related surcharges known as IRMAA. These surcharges are based on modified adjusted gross income (MAGI) from the prior two years. Crossing an income threshold by a small amount can result in higher monthly premiums for an entire year.

Planning withdrawals carefully can help retirees stay below these costly cliffs.

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Making drastic 401(k) investment decisions late in life

Some retirees may react to market volatility by making sudden, emotional portfolio shifts. Moving too aggressively into cash can reduce long-term income potential, while staying overly invested in stocks can increase risk.

Investment decisions in your 70s can benefit from gradual adjustments rather than abrupt changes. Stability and income reliability tend to matter more than chasing growth at this stage.

Ignoring plan fees that eat into your investments

Even small 401(k) fees can have an outsized impact when account balances are large and withdrawals are ongoing. Administrative fees, fund expense ratios, and advisory costs all reduce net returns.

Retirees may overlook these costs because they feel less visible than market losses. Over time, unchecked fees can quietly drain your hard-earned retirement savings.

Forgetting to update your spouse as your beneficiary

Life changes do not stop at retirement. This includes always keeping your beneficiary forms up to date. An outdated beneficiary designation can override a will or trust and create complications for surviving spouses. This mistake could delay access to funds or even redirect assets unintentionally.

Regular reviews help ensure retirement accounts align with current family and estate plans.

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Not maximizing catch-up contributions if you're still working

Retirees may continue working part-time or full-time into their early 70s, but could fail to take full advantage of catch-up contribution limits. For 2026, workers age 50 and older can contribute an additional $8,000 in catch-up contributions to a 401(k).

Missing this opportunity can mean leaving tax-advantaged savings on the table. Even a few extra years of contributions can improve long-term flexibility.

Not taking advantage of the full employer match if you're still working

Employer matching contributions remain one of the most valuable benefits available to working retirees. Failing to contribute enough to earn the full match is effectively turning down additional compensation.

This oversight is especially costly late in a career when time to recover lost contributions is limited. Maximizing the match can immediately boost retirement savings.

Forgetting about old 401(k) accounts from past jobs

Retirees may accumulate multiple 401(k) accounts over decades of work. Forgotten accounts may remain invested in outdated options or carry higher fees.

Tracking and consolidating old plans can simplify required distributions, reduce administrative complexity, and help you avoid surprising financial mistakes. Organization becomes increasingly important as withdrawal rules change over time.

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Bottom line

Small 401(k) missteps in your 70s can be costly. Required minimum distributions, taxes, health care costs, and beneficiary details all interact in ways that can amplify errors.

Taking time to review withdrawals, investment choices, and account details can help preserve income and reduce surprises. It may be worth reflecting on whether your current 401(k) strategy still supports your retirement plan as priorities and rules continue to shift.

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