A practical guide to avoiding the hidden pitfalls that drain your savings, security, and peace of mind

As I get closer to retirement, or as I prefer to call it, work-optional status, I’m reminded of a quip by Danish physicist Niels Bohr, 1922 Nobel prize laureate. Paraphrasing, “It’s very difficult to make accurate predictions. Especially about the future.” 

Even more so when we try to predict how things will unfold over several decades.

Even diligent savers make mistakes that can quietly erode the future they’ve worked for. Murphy warns that “If anything can go wrong, it will,” and “If there are four ways something can go wrong and you prevent all four, a fifth will pop up.” 

But that doesn’t mean we shouldn’t do our best to prevent at least those we can think of.

So, I try to figure out all the ways my rosy retirement plans and projections could fall apart, then mitigate those risks.

Saving Without a Retirement Spending or Withdrawal Plan

If, like most of us, you’re busy making money, saving, and investing, not to mention dealing with a seemingly endless list of chores, errands, projects, and most importantly, family, it’s easy to put off crafting a written plan for something that’s years, if not decades, away.

The pitfall is that at some point, that far-off future arrives, and if your retirement plan consisted of “I’ll retire at age 65 (or 45 if you’re ambitious)” or “I’ll retire when my portfolio hits $1 million,” without planning for taxes, Required Minimum Distributions (RMDs), bear markets, etc., you don’t have a plan. 

At best, you have a somewhat-justified hope.

As Jeff Schlotterbeck, Founder of Water Street Wealth Management, cautions, “One of the biggest pitfalls I see in retirement planning is focusing too much on ‘the number’ instead of the income strategy behind it. People often chase a target portfolio size without thinking about how to turn those assets into reliable, tax-efficient income. A strong retirement plan should integrate investments, taxes, and order of withdrawals rather than treat them as separate decisions.”

What to Do

You can do it yourself, or with the help of a financial planner. 

It can be as fancy as a 20-page document with colorful pie charts, Monte Carlo simulation results, and cash flow diagrams, or as simple as an Excel worksheet. The plan should, at a minimum, address the following:

• Your (and your spouse’s, if you have one) retirement age(s).
• Expected retirement income sources and annual amounts, including plausible investment returns and cash flow from assets (e.g., stocks, bonds, crypto, rental properties, etc.).
• Build a detailed retirement budget, rather than a generic “80 percent of pre-retirement income.” Start from your pre-retirement one, remove what you won’t need anymore (e.g., commuting expenses, office wear, saving for retirement, payroll taxes, etc.), and add or supplement things you’ll want to enjoy in retirement. Then, don’t forget to add inflation-based adjustments for things that go up in price (e.g., groceries, gas, etc.) but not for fixed payments (e.g., fixed-rate mortgage). If you’re not sure what inflation numbers to use, here are the baseline inflation numbers (from changes in the Consumer Price Index for All Urban Consumers, or CPI-U, from January 2000 to June 2024): 2.6 percent for most expenses and 3.3 percent for healthcare costs.
  • Erik Buatte, founder of LifeFirst Wealth, says, “For a retirement budget that really works, you have to cover four pieces no matter what: housing, transportation, food, and healthcare. If you take care of these four, you’re well on your way to taking care of your 100-year-old self, allowing yourself to spend on other things. Another thing that can derail any plan is long-term care (LTC). For a robust plan, I earmark funds for LTC, because it makes a big difference for retirees’ peace of mind.”
• Your retirement budget needs to cover fixed expenses but also address your financial goals. To budget travel, scale from recent trips to the number and duration you want to enjoy.
• Order of withdrawal from account types: tax-deferred, such as traditional IRAs and 401(k) plans; tax-free, such as Roth IRAs and Health Savings Accounts (HSAs), and taxable accounts; and different asset classes, e.g., stocks, bonds, and cash.
• Estimated taxes: I use today’s rates and brackets, adjusting them for the assumed inflation.
• Rules on annual withdrawals and how you’ll adjust them when, not if, markets fall (e.g., the Guardrails Approach), including which categories you’ll trim and by how much.

In my case, I used Excel for many years. Recently, however, I hired a professional financial planning firm to craft a plan for me. Contrasting their proposed plan with my DIY one will help me identify what I need to improve, enhancing my confidence that it will all work out.

Remember that your plan needs to be a living document that you review and update annually, plus anytime there’s a significant change in your goals, income, expenses, and/or portfolio value. Doing this, beyond reducing your risk of running out of money in old age, you’ll have peace of mind and “permission to spend” on things you enjoy (once they’re in the plan).

Christian Ortez, Managing Director at Saxe Capital, agrees, “A true retirement plan is a system, not a product or a static ‘thing.’ It’s a dynamic system. You may build a plan that works today, but next year, estate planning laws change, so you must update the estate plan. Updating your estate plan affects your taxes, so you have to update that, etc. You can’t rely on static assumptions. Inflation, tax law, and family dynamics are all moving targets. Plans built without adaptive mechanisms (such as cash flow guardrails or annual recalibration) age poorly. A good plan is an ecosystem of interrelated disciplines, tax planning, investment management, estate planning, etc., that you keep fine-tuning.”

For business owners, Ortez adds, “If you’re a business owner, you must integrate your business finances, risks, and value into your personal plan. After all, the business usually funds your personal finances.”

Speaking to retirement income planning, Stephen Mazer, Principal, Senior Wealth Advisor of Rational Wealth Solutions, quotes heavyweight boxing champ Mike Tyson, who famously said, “Everyone has a plan until they get punched in the face.” He explains, “The investment industry encourages people to plan and use Monte Carlo simulations to determine their ‘chance of success.’ I’ve seen spouses look at each other with wonder when their number is 93% and they’ve saved beyond their wildest dreams. Of course, there will be unknowns in retirement, but your retirement income doesn’t have to rely so much on investment returns. Look for a fiduciary retirement phase advisor to help plan your income, preferably on a guaranteed basis.”

Brennan Decima, Owner, Decima Wealth Consulting, expands, “When you’re working, your financial life has four parts: a salary to pay the bills, a bonus to enjoy or save, an emergency fund for surprises, and a retirement account for the future. Then that future arrives in the form of retirement, and you ask one account to do all four jobs. That’s why a clear retirement spending plan is so important. Creating separate buckets creates meaningful peace of mind and clarity. A protected account for essential expenses, dividends that feel like a bonus, cash for surprises, and growth assets reserved for later years or your legacy.”

Underestimating Major One-Off Expenses

As part of your retirement plan, you’ll figure out your assets from your account statements, your income (with the caveat that bonuses, if any, usually change from year to year) from paychecks (or P&L statements if you’re a business owner), and budget straightforward things, like mortgage payments or rent, auto loan payments, utilities, etc. 

Budgeting for major expenses that happen rarely, or new things you plan to start doing, is trickier. This could include:

• Major health events or expensive dental work, such as tooth implants.
• Replacement of your home’s roof.
• Replacing major appliances.
• Remodeling your home.
• Major landscaping work.
• Buying a new car (or, for the more well-off, boat).
• Expensive vacations.
• Expensive new hobbies.
• Helping a kid pay for a wedding or a down payment on a home.

It’s these one-off, rare, or simply new major expenses that could undo your planned budget. 

What to Do

• Build a sufficient emergency fund (see details below).
• Pre-retirement, take care of expensive one-off items where possible. This can include, e.g., major dental work, hearing aids, vision care, and any big-ticket home repairs, remodeling, or landscaping.
• Consider buying a home warranty that covers things like your roof, air conditioning system, major appliances, etc. Using one of these warranties, I’ve had several expensive repairs, such as replacing our HVAC system, for a few hundred dollars, rather than paying the full multi-thousand-dollar cost.
• Add a catchall category of, say, 10 percent for the unexpected. After a few years in retirement, you’ll have a better sense of your spending and can reduce that to 5 percent.

Underestimating High Recurring Costs That Change A Lot, Such as Healthcare

Especially if you retire before you’re eligible for Medicare and are used to having your employer cover most of the cost of your health insurance premiums, this can be a shocking expense.

According to KFF, a 60-year-old couple with an annual household income of $62,700 currently pays about $10,656 for a Silver-level Affordable Care Act (ACA) plan (after accounting for subsidies). If Congress doesn’t renew the subsidies, annual costs could jump to nearly $30,000 in 2026.

What to Do

If you don’t want to keep running out of money before the month ends, do this:

• For health insurance, once you don’t have an employer covering 80 to 100 percent of premiums, get private market quotes for your age and the level of coverage you prefer. In our case, since we’re generally healthy, a Bronze plan saves us more on premiums than the higher out-of-pocket costs due to the high deductible.
• If you’re eligible for Medicare, look at the cost of the plans you’ll pick, and add realistic costs for dental, vision, and hearing care, since those aren’t covered by Medicare in most cases. After a few years in retirement, update the budget based on your experience. 

Putting Everything in Tax-Deferred Accounts (The IRS Will Eventually Want Its Cut)

If you’re a high-income earner, you’re probably socking away as much as you can into tax-deferred accounts like traditional 401(k) plans and (up to certain income limits) traditional IRAs. This is a smart move to minimize current income taxes. However, it could backfire if you don’t also invest in taxable accounts. 

Here’s how this could hurt. If you retire early (before age 59 and ½), penalty-free withdrawals can be tricky. Even if you’re already 60 or older, every dollar you withdraw from your tax-deferred accounts is taxable income in the year you withdraw it.

Once you reach the threshold age for Required Minimum Distributions (RMDs), as early as age 73, you’ll be forced to withdraw a minimum amount each year. Based on the IRS table, at that age, the current number translates to a reasonable 3.77 percent of your total balance across all tax-deferred plans. By 80, this grows to 4.95 percent, at 90, it’s 8.2 percent, and if you’re lucky enough to reach 100, it’s 15.6 percent! 

You’re forced to take RMDs even if you don’t need any of that money to cover expenses, and all of it is taxable income in the year it’s withdrawn. Adding insult to injury, RMDs could bump up your income to the point that you’re subject to the so-called Income-Related Monthly Adjusted Amount (IRMAA), which could increase your annual Medicare costs by at least $3108 and up to $7547!

What to Do

First and foremost, to the extent possible, diversify your “tax buckets.” This means putting aside money not just in tax-deferred accounts.

• Contribute the maximum allowed to an HSA, if your health plan qualifies. If possible, don’t use that HSA money to cover current-year health expenses. Rather, pick an HSA that lets you invest in high-quality, low-cost mutual funds, and let your money grow until retirement. HSAs have a triple tax advantage: your contributions are pre-tax, so you pay no taxes on them in the year of contribution, you pay no taxes on growth in the plan, and you pay no taxes on withdrawals made to cover qualified health-related expenses, and unless you die young, you’re sure to have plenty of health expenses to cover.
• If you’re in a lower tax bracket than you expect to be in retirement, fund Roth 401(k) plans and Roth IRAs. The latter have income limits, but those may be side-stepped through an immediate Roth conversion. Note that immediate conversion works only if you don’t already have a large balance in traditional IRAs, or if you roll all such tax-deferred IRA balances into your traditional 401(k) plan before the conversion.
• Invest some of your money through taxable accounts. Long-term gains in such accounts get taxed only when realized, and at lower tax rates than wage income or retirement-plan withdrawals. Note that if you invest in mutual funds, they’re required by law to distribute all gains to you each year, so you’ll pay taxes on gains there each year.

In pre-RMD years, if you don’t need to draw much money from your tax-deferred accounts, because, e.g., you downsize your home and have extra cash left over, you receive a significant bequest, etc., consider a Roth conversion of enough tax-deferred money to “fill” the lowest tax brackets. This will result in paying tax on the converted amounts in those years, but at lower tax rates than you’ll pay once your RMDs exceed your cash needs.

Not Building and Maintaining an Emergency Fund

Even if you like to be fully invested and hate to see significant sums earning sub-par returns (let alone losing value due to inflation), having no emergency fund is risky. 

Imagine having a significant medical issue, or a roof that needs to be replaced, or hitting someone with your car and having to pay much more than your insurance covers. If any of these happen during a market crash, you’ll be forced to liquidate investments at the worst time, when prices are depressed.

Even if nothing bad happens, having little or no cash can be problematic. 

Say you want to help your kid with a down payment on a home. If your investments are in a slump and you have little, if any, cash, your ability to help is seriously compromised.

What to Do

A true emergency fund isn’t $500 or even $1000. That can only cover “financial road bumps.” An emergency fund needs to cover big-ticket problems.

• Right-size your fund. If you’re single with no kids and have a stable job and a solid family safety net, 3 months’ worth of fixed expenses may suffice. If you’re the sole breadwinner with young kids and an unstable income, 12 months of expenses may not be enough.
• If you’re nearing retirement, keep 2 to 3 years’ worth of essential expenses in cash equivalents (e.g., short-term Certificates of Deposit, money market funds, or high-yield savings accounts).
• To preserve financial flexibility, avoid locking most of your capital in illiquid assets.
• Minimize the fixed expenses in your retirement budget so you can easily trim spending as needed during market crashes.
• If you have significant net worth, buy an umbrella policy. This covers, e.g., damages you’d have to pay if you’re held responsible for an accident. Even better, it incentivizes the insurer to defend you from lawsuits at no additional cost.

Entering Retirement with Expensive Debt

“Expensive” is subjective.

Many people warn you to pay off your mortgage before you retire. That isn’t necessarily bad advice, but it may not be the best, financially.

If, like many homeowners, you’re sitting with a 3-percent fixed-rate mortgage, paying it off early may let you sleep better at night, but you’d be better off putting the extra cash into something that brings in cash flow.

According to Bankrate, as of this writing (October 2025), the highest-yield savings account pays 4.25 percent APY (annual percentage yield). With a 3-percent fixed mortgage, money in such an account would earn over 40 percent more than your mortgage interest cost.

What’s far more certain is that carrying (especially into retirement) significant high-interest debt, such as a credit card balance with an APR (annual percentage rate) north of 24 percent, is a major problem. Worse yet, if you’re carrying a credit card balance, you may also be living beyond your means, which would spiral you ever deeper into debt.

Since credit card payments aren’t discretionary, even if you can afford them, you have less flexibility if your income suddenly drops.

What to Do

• If you’re carrying credit card debt or any other high-interest debt, make it your top financial priority to pay it off before retiring. You can use the snowball method or the avalanche method to pay it off. The former has you pay the minimum payments on all but your smallest debt, and as much as possible above the minimum on that smallest one. Once that’s paid off, you add the payment that’s no longer needed for the paid off debt to what you’re already paying toward the next smallest debt. Rinse and repeat until all debt is paid off. The avalanche method does the same, but instead of paying debt off in increasing order of debt size, it focuses on debt by decreasing order of interest rate.
• According to KFF, 4 in 10 American adults carry medical debt, and another 2 in 10 are one unexpected medical bill from falling into medical debt. To avoid joining these alarming statistics when you can least afford it, use health, dental, and long-term care insurance; save and invest in an HSA (as mentioned above); and as soon as you’re eligible, enroll in Medicare and a Medigap or Medicare Advantage plan.

Insufficient Diversification

Aristotle’s advice, “Moderation in all things,” applies to investment, too.

The easiest way to do well financially is to avoid concentrating all your money in a single stock, a single sector, a single country, or, as we saw above, a single tax treatment.

In some cases, notably in the Tech sector, employees receive incentives in the form of stock options or Restricted Stock Units (RSUs). In most cases, these can be exercised to purchase the employer’s stock at a discount.

If you follow Peter Lynch’s timeless advice to “buy what you know,” and believe your employer has a strong future, you’d be tempted to keep those shares as a long-term holding. 

In many cases, that can work out well.

However, when it doesn’t, it could be catastrophic.

That’s why it’s a bad idea to invest most, let alone all, of your money in a single stock. This is doubly and triply so if the stock is your employer’s, because if the company folds, you lose your job and most or all your investments at the same time.

Now-defunct energy company Enron is a case in point. 

In 2001, Enron declared bankruptcy due to massive fraud by company executives. Supervisory Special Agent Michael E. Anderson, who led the FBI’s Enron Task Force in Houston, said of the thousands of hard-working employees, “They lost their retirements, their health insurance, their livelihoods…”

Don’t let something like this devastate your finances.

Even if you’re diversified across many stocks and industries, but not beyond stocks, e.g., investing 100 percent of your portfolio in an S&P 500 index fund, you could lose half your portfolio’s value and have it take years to come back. 

That’s what happened to the US stock market during the so-called “lost decade,” from 1999 to 2009. From peak to trough, US stocks lost 54 percent and took over 12 years to reclaim their previous high. 

The risk of over-concentrating resources in a single asset or asset class isn’t limited to stocks either. If your net worth is locked in your home equity, you could be one crash away from losing it all.

In the first quarter of 2007, the average price of homes sold in the US peaked at $322,100. By the first quarter of 2009, it dropped over 20 percent. That’s bad enough, but markets like Las Vegas lost a far more brutal 60 percent!

Homeowners in such a market who had, say, $150,000 equity in a $250,000 home had their equity totally wiped out.

What to Do

• To avoid an Enron-employee-like fate, diversify your income sources (e.g., wages, stock dividends, rental real estate, business income or side hustle, annuities, etc.).
• Allocate your investments across different countries, economic sectors, stocks, bonds, rental properties, etc.
• Keep your overall portfolio’s risk level no higher than what lets you sleep well at night and doesn’t keep you glued to Bloomberg TV or the equivalent. Then, when, not if, the market crashes, you won’t panic sell and lock in steep losses.
• On the flip side, don’t over-allocate to safe investments. Over a multi-decade retirement, cash and bonds will likely not keep up with inflation, let alone keep your nest egg growing.

Jeremy Keil, Financial Advisor and Author, points out several important considerations for your retirement plan: “The most important number in your retirement planning is your ‘Retirement Longevity Number.’ You need to think long and hard about both ‘how long am I going to be living in retirement?’ and ‘what happens if I die earlier or later?’ You can get a reasonable estimate of how long you and/or your spouse, if any, will live in retirement from https://www.longevityillustrator.org/. Also, keep in mind that the average American retires three years earlier than they expected.

“Then, you need to make two critical investing decisions. First, ‘How much money do I keep out of the market?’ This is based on the number of years of withdrawals you want to be able to take before you must tap your stocks. Second, ‘How much risk do I take within the market?’ Once you have enough money out of the market, the level of risk you take with your growth money likely matches the level of risk you were willing to take before you retired. As you map out your withdrawals each year, you evaluate how much you may need to move out of the market to replenish your short-term-income bucket.”

Sequence of Returns Risk

It’s a fact of life.

Markets tank from time to time. 

For example, since World War II, the US stock market suffered a bear market (a drop of at least 20 percent from a recent high) every five years, on average.

The timing of bear markets vs. when you retire can spell the difference between retirement “success” and “failure.” This is what’s known as “sequence of returns” risk.

If the market crashes in the first few years of your retirement, your “safe withdrawal rate” may not be safe, forcing you to drastically cut spending or risk depleting your nest egg so severely that later market gains can’t save you.

Conversely, if you experience a bull market in those first few years, the next bear market would start from a higher portfolio balance, so you won’t need to sell more shares than planned at depressed prices. 

That’s why this risk peaks in the period that starts just before retirement begins until about 5 years after. 

What to Do

• If you’re in this danger period, keep at least 2 years’ worth of expenses in cash equivalents, and a few more years’ worth in fixed income or other assets that are less volatile than stocks. On average, bear markets last about 9.5 months but have been as long as 20.7 months (1973-74), so this should protect you from needing to deplete your stock allocation in a bear market.
• The risk is also lower if your retirement budget is low relative to your nest egg size, say under 3 percent.
• Finally, the greater the portion of your budget that’s discretionary, the more you’ll be able to ride out bear markets by trimming spending for a while.

Charles Luong, President, Endeavor Advisors, expands, “Make retirement a cash flow conversation first. Plans fail when households run out of spendable cash, not when they miss an investment return target. Prioritize a conservative, fundable spending plan for the first eight to twelve years and build a liquidity ladder to support it. Sequence of returns and tax placement are quiet plan killers. Hold a three-to-five-year cash or short-duration buffer, and coordinate withdrawals across taxable, tax-deferred, and tax-free accounts so taxes don’t quietly erode decades of savings. 

“You should also model tax policy and Roth conversion scenarios and make explicit plans for long-term care and health costs, Social Security claiming and spousal strategies, housing timing and home equity, concentration risk from employer stock or a single business, and product risk, since annuities and insurance policies often hide fees and liquidity limits. 

Next, don’t treat rules of thumb as universal. The 4-percent rule, fixed glidepaths, and headline return assumptions are conversation starters, not law. They ignore longevity, taxes, health shocks, and predictable human behavior under stress. Build plans that assume people will panic in crises and act emotionally: fund an income floor with conservative assets or a reliable lifetime income, then give the remainder room to grow. Also, limit panic selling by putting in place simple, low-friction rules. Finally, always look at the math and the alternatives before buying lifetime income products.”

Upsizing Your Home Beyond Your Reach

This one is tricky because “beyond your reach” is subjective. So, here’s what I mean by that. 

Unless you’re unique in this regard, you finance homes with a mortgage, with predetermined and fixed monthly payments you can budget for.

But don’t forget the hidden costs of keeping a large home.

• Furnishing a larger home costs more.
• Property taxes and insurance for a larger (more expensive) home are higher.
• Heating and cooling a larger home costs more.
• Buying a more expensive home locks in more of your capital in equity, where it doesn’t help your cash flow. It may, once you sell, generate a large profit from leveraged appreciation, but that’s years in the future, and may not happen.
• Unless you love mowing your lawn, yard care for a large home costs more.
• Unless you’re fine with cleaning your toilets, a cleaning service for a large home costs more.
• Maintenance and repair of a large home costs more, because there’s more that can break. Worse, many craftsmen charge more for the same job for fancier homes.

You get the point. Right?

According to a Clever Real Estate survey, “82 percent of Americans who bought a home in 2023 or 2024 have at least one regret about the home-buying process, with buyers most likely to regret that their home requires too much maintenance (28 percent).”

This one may have gotten me, but the jury is still out on the “too high” part. A few years pre-COVID, we moved into our dream home, significantly upsizing from our previous house.

We love this place.

But if we sold it, we could move to a nice home that’s smaller but not too small, with no mortgage. This would cut our housing cash flow needs by more than 40 percent. For now, at least, we don’t have to. 

But at some point, it may become too much effort and possibly not worth the cost for us to keep.

What to Do

• When considering upsizing your home, calculate the likely full cost and cash flow impact:
  • Mortgage (the principal part isn’t a cost but does affect your cash flow): depending on your home price, mortgage interest rate, and down payment size, this is typically between 4 and 6 percent of the sale price.
  • Property tax and insurance: This varies from jurisdiction to jurisdiction and market to market. For us, it’s about 1.2 percent of the sale price.
  • Utilities, repairs, maintenance, and household expenses: This varies significantly from one family to the next. In our case, it’s about 3.8 percent of the sale price.
  • Total: For us, about 9 percent of the sale price per year.
• Once you have a solid estimate of the full costs, consider if you can afford to carry that annual cost and cash flow impact. Even if you can, consider whether it’s worth it for you, given the opportunity cost of having less money to invest in liquid assets and/or having a larger discretionary budget (such as travel, gifts to kids and grandkids, charitable giving, etc.). 
• If you can keep housing costs under 25 percent of your budget, that’s reasonable, and under 20 percent is better. However, consider that what was under 20 percent pre-retirement could grow to 30 percent once you retire.

It Isn’t All Financial. Consider Your Identity, Purpose, and Emotional Health

Especially if you’re highly driven and successful, you’ve probably tied up much of your identity to your work or business.

How often have you started a conversation with someone you met at a party, a friend’s house, or a coffee shop (or had them ask you), “What do you do?” If you’ve tied identity to work, “I’m retired” can feel like a conversational dead end.

Many people retire without a clear idea of what they want to do that will give them a reason to get out of bed every morning. This could lead to boredom, overspending, depression, and even early death.

According to the Journal of the American Medical Association (JAMA), lacking a sense of purpose was found to have a very high correlation with mortality. Their findings showed that people in the lowest category of life purpose were more than 2.4 times more likely to die during the study period (2006-2010) than those in the highest life-purpose category, adjusting for age, sex, educational level, race/ethnicity, marital status, smoking status, frequency of physical activity, alcohol consumption, body mass index, functional status, 1 or more chronic health conditions, depression, anxiety, cynical hostility, negative affect optimism, positive affect, and social participation.

JAMA also reports that social isolation and loneliness were associated with increased risk of dying (32 percent and 14 percent higher, respectively).

What to Do

• Before retiring, plan what you’ll do with all your (much more abundant) free time. This could be new (or renewed) hobbies; travel; spending time with grandkids; spending time with friends; taking adult-education classes; volunteering; mentoring young people; or pursuing engaging, low-stress, part-time work.
• To the extent possible, test-drive your planned activities before retiring, so you know if they’ll be as engaging as you expect. This may, but doesn’t have to, include taking a sabbatical.
• Maintain friendships and try to make new friends with shared interests that aren’t tied to work. To this end, consider joining (or forming) a group that meets weekly, whether for a joint activity or to catch up over coffee.

A Fascinating, Different Approach

Ajay Vadukul, Vice President of Endeavor Advisors, offers a different way altogether to approach retirement planning. 

He says, “I disagree with framing retirement as primarily a portfolio optimization problem. That framing underweights governance, legal plumbing, and human behavior. I also disagree with any implication that product complexity is the main enemy. Complexity is a symptom when operational gaps exist. The real failure mode is poor execution: missing beneficiary updates, inaccessible accounts, unclear authority, and no plan for cognitive decline. Fix those first, then choose products and allocations. When recommending lifetime income solutions, always show the math and the operational pathway to deliver that income to the household in practice. 

“I suggest treating retirement as a governance and resilience challenge as much as an investment question. Execution, paperwork, and simple decision rules are where good plans survive stress. A great portfolio is useless if decision rights, documents, or simple rules are not in place when markets, health, or family stress hit. Put the plan in writing, name who will act if the primary decision maker is impaired, and embed triggers that convert strategy into action. For example, documented stop-loss or no-sell thresholds, a withdrawal ladder with clear priority for which accounts to tap, and a scheduled governance review every year or after a 20-percent portfolio move. Also, verify that a spouse or agent can move money on a weekend. 

“For income, think beyond securities. Inflation-linked income matters for real spending power, so include I Bonds, Treasury Inflation-Protected Securities (TIPS), or targeted annuitization that matches spending growth. Design partial annuitization around expected spending, not a generic payout. Plan for non-financial failure modes: family conflict, cognitive decline, probate surprises, and digital-asset chaos. 

“Operational resilience is a risk. Consolidate where it helps oversight, require fee transparency, set up fraud alerts, and keep an emergency credit line separated from day-to-day accounts. Tax basis and estate mechanics deserve deliberate treatment. Step-up in basis, Income in respect of a decedent (IRD) , and survivor pension rules change what heirs actually get. Use Roth conversions, charitable vehicles, and beneficiary design intentionally, not as afterthoughts. 

“Finally, implementation risk is real: coordinating tax, legal, and investment advice matters. A stitched-together plan that isn’t executable will fail under stress.”

To me, all this makes a lot of sense, and I plan to implement as much of it as I can.

The Bottom Line

If you want to increase your chances of a comfortable retirement, you need to plan for it.

Paraphrasing Ben Franklin, Failing to plan is planning to fail.

According to a Goldman Sachs Asset Management report, “Working individuals with a personalized plan for retirement reported more confidence, less stress managing their savings, being less likely to delay retirement due to competing priorities, and more likely to increase year-over-year savings. Retirees who had a plan when preparing for retirement were more likely to report higher retirement savings, better lifestyle in retirement, less stress entering retirement, and were less likely to work part-time in retirement due to insufficient savings.” 

Planning for retirement isn’t a once-and-done thing.

You’re trying to predict many factors, such as inflation, taxes, expenses, health, investment returns, and more, over a period spanning decades. Even with a plan, as seen above, many pitfalls, if left unattended, can derail you.

There’s no question that you won’t get it all right. But that’s ok. You can build resilience into your plan and course-correct when needed. 

• Follow Vadukul’s advice on retirement plan governance, resilience, execution, etc.
• Between building an emergency fund and keeping fixed costs low, make sure your plan has a margin of safety or cushion.
• Revisit and update your plan as new developments change your assumptions.
• To minimize large, unexpected medical bills, stay as engaged, active, and healthy as possible.

If all this sounds overwhelming, take it one small step at a time. What’s one thing you can do right away to get started?

Disclaimer: This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.

About the Author

Opher Ganel, Ph.D.

My career has had many unpredictable twists and turns. A MSc in theoretical physics, PhD in experimental high-energy physics, postdoc in particle detector R&D, research position in experimental cosmic-ray physics (including a couple of visits to Antarctica), a brief stint at a small engineering services company supporting NASA, followed by starting my own small consulting practice supporting NASA projects and programs. Along the way, I started other micro businesses and helped my wife start and grow her own Marriage and Family Therapy practice. Now, I use all these experiences to also offer financial strategy services to help independent professionals achieve their personal and business finance goals. Connect with me on my own site: OpherGanel.com and/or follow my Medium publication: medium.com/financial-strategy/.

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