I’m a Financial Advisor: Here Are 12 Retirement Mistakes That Cost Clients $100K or More

Laura BeckTue, April 21, 2026 at 11:11 AM UTC

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Financial advisors see the same retirement mistakes over and over. Some cost you a few thousand dollars. Others cost you six figures or more.

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Lance Morgan, founder of College Funding Secrets, and Aaron Young, private wealth advisor and CEO of Northwestern Mutual’s Blueprint Financial Group, have watched clients make expensive decisions that haunt them for decades. Here’s what they see most often.

1. Waiting Too Long To Start Saving

Your 20s and 30s feel too early to worry about retirement, but that delay costs real money.

“Time is what allows compound growth to work, not just contribution size,” Young said. “Someone who waits even 10 years to start investing often has to contribute significantly more each month to reach the same retirement target.”

That delay alone can cost you six figures in lost growth. The money you put in at 25 has 40 years to grow. The money you put in at 35 only has 30 years. That 10-year difference compounds into a massive gap by the time you retire.

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2. Relying Too Heavily on Your 401(k)

Most people treat their 401(k) like it’s their entire retirement plan. Morgan thinks that’s a mistake.

“If you understand the history of 401(k) plans and IRAs, they were only created to ‘supplement’ a pension in retirement,” Morgan said.

The problem isn’t that 401(k) plans are bad investments. It’s that they limit your options in retirement. The standard advice is to live on 4% of your balance each year, which means your income is way lower than what other investments might generate.

“Money inside a 401(k) or IRA can earn a great rate of return but the reason it could cost you over $100,000 in retirement is because of the cash flow,” Morgan said. “The cash flow to live on in retirement is much less than other investments like real estate for example.”

3. Ignoring Tax Diversification

Putting everything into tax-deferred accounts seems smart now, but it sets you up for a tax problem later.

“Without tax diversification across taxable, tax-deferred and tax-free accounts, retirees may face higher taxes on withdrawals than expected,” Young said.

Morgan agreed. “If all your retirement is in qualified plans like 401(k) plans and IRAs, that means they haven’t been taxed yet,” he said. “If taxes increase in the future, you could pay a lot more than an extra $100,000 in taxes during retirement.”

The fix is splitting your savings between traditional retirement accounts, Roth accounts and taxable investment accounts. That gives you flexibility to manage your tax bill when you start pulling money out.

4. Underestimating How Long Retirement Lasts

Planning for 15 years of retirement sounds reasonable until you hit 80 and realize you might live another decade.

“Many people plan for a 15-year retirement when realistically, they may need income for 25 to 30 years,” Young said. “Underestimating longevity can lead to under saving and overspending early in retirement.”

More than half of U.S. adults believe they’ll outlive their retirement savings, according to Northwestern Mutual’s 2025 Planning & Progress Study. That fear isn’t unfounded if you’re planning for too short a timeline.

5. Focusing on Rate of Return Instead of Cash Flow

Morgan spent years as a traditional financial advisor before he figured out this one.

“When I started my career as a financial advisor, I was trained on all the products and the rate of return that each investment could offer,” Morgan said. “Over the years, and as I have worked with some of the wealthiest clients in the country, I have learned the importance of cash flow more than rate of return.”

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An investment that grows 8% a year but doesn’t pay you anything until you sell it isn’t as useful in retirement as an investment that pays you steady income every month, even if the growth rate is lower.

6. Keeping Too Much Cash for Too Long

Sitting on a pile of cash feels safe, but inflation eats away at it every year.

“Holding excessive cash may feel like a safe option, but over time, inflation erodes purchasing power,” Young said. “When retirement funds stay too conservative for too long, portfolios may not grow enough to support future income needs.”

You need some cash for emergencies, but parking your entire retirement in a savings account guarantees you’ll lose money to inflation.

7. Claiming Social Security Too Early

You can start taking Social Security at 62, but that doesn’t mean you should.

“Taking benefits at the first eligibility age can permanently reduce monthly payments,” Young said. “The difference between early and optimized claiming strategies can add up to well over $100,000 over retirement.”

Every year you delay claiming benefits between 62 and 70, your monthly payment goes up. For a lot of people, waiting is worth it.

8. Paying Too Much in Taxes During Your Working Years

High earners get hit hard on taxes, and most aren’t taking advantage of deductions available to business owners and real estate investors.

“As a high income W-2 employee, you are paying more than your fair share in taxes,” Morgan said. “However, most families could take advantage of several tax benefits of owning a business and real estate like bonus depreciation and save a lot of money in taxes that could be used towards more retirement savings.”

9. Not Saving Consistently

Starting and stopping your retirement contributions kills your momentum.

“Even short contribution gaps can create significant long-term shortfalls because you lose valuable compounding time,” Young said.

Set up automatic contributions so the money comes out before you see it. Consistency matters more than contribution size.

10. Overlooking Healthcare and Long-Term Care Costs

Healthcare is one of the biggest expenses in retirement, and most people underestimate it.

“Premiums, out-of-pocket costs and potential long-term care needs can significantly impact savings,” Young said. “Planning for these costs ahead of time helps prevent large, unplanned withdrawals later.”

Medicare doesn’t cover everything. Long-term care is expensive. Budget for both or you’ll blow through your savings faster than you planned.

11. Not Having Access to Your Money

Morgan sees this one all the time. People lock up everything in retirement accounts and home equity, then wonder why they can’t take advantage of opportunities.

“Most of the country is putting most of their money into their retirement accounts and increasing their home equity,” Morgan said. “Both are hard to get access to the money without a penalty or qualifying from the bank.”

You need liquid cash you can access without penalties or loan applications. “Having access to your money could be the easiest way to avoid a $100,000 mistake or missed opportunity,” Morgan said.

12. Not Working With a Professional

Both experts agreed on this one. The mistakes that cost you six figures are preventable if you get help early.

“Taking a proactive planning approach with a financial advisor can help reduce costly mistakes and strengthen long-term retirement readiness,” Young said.

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