You can save diligently for decades and still make a few retirement planning mistakes that put your financial security at risk.
Wes Moss, host of Ask an Advisor on the Clark Howard Podcast, has spent decades working on the front lines as a fiduciary financial advisor. After walking thousands of families through the pivotal transition from saving to spending, Wes has found that the most devastating pitfalls rarely involve picking the wrong individual stock or missing the latest investing fad. Instead, they almost always stem from foundational issues: debt structure, marital communication, and cash-flow reality.
We asked Wes to break down the most common — and costly — retirement planning mistakes he sees today, and what pre-retirees should do to protect themselves.
1. Carrying Mortgage Debt With No End in Sight
Entering retirement with housing debt is one of the heaviest financial anchors you can drag into your next chapter.
Through extensive research on what actually drives retiree satisfaction, Wes discovered a direct correlation between peace of mind and the amortization schedule on a home loan.
“Retirement happiness rises as the number of years left on your mortgage falls, and my latest research shows the ‘money green zone’ begins once you have 9 years or less remaining on your payoff schedule,” Wes explains. “Carrying an open-ended (long) mortgage into retirement, with no clear payoff date, is one of the heaviest rocks you can put in your retirement backpack.”
When a large mortgage payment follows you into retirement, it permanently inflates your baseline living expenses, forcing you to pull more money out of your investments regardless of market conditions.
If you are approaching retirement with significant housing debt, prioritize getting your remaining payoff window under that nine-year threshold — or wiping out the loan entirely before you clock out for the last time.
2. The Spousal Disconnect
Retirement isn’t just an individual financial balance sheet; for married couples, it is a complete lifestyle overhaul. When two partners aren’t operating from the same playbook, the consequences can be severe.
“Couples who are significantly misaligned on retirement spending, saving, and investing create a tornado of discontent that can derail even a well-funded plan,” Wes warns. “The fix isn’t necessarily more money, it’s a written plan or blueprint that both spouses actually agree on, so decisions get made from the same page instead of two different ones.”
One spouse might envision traveling abroad six months a year, while the other wants to stay home, renovate the kitchen, or financially assist adult children. If these differences aren’t hashed out in advance, the resulting friction quickly turns financial choices into emotional battlegrounds. Sitting down to write out shared priorities, expected spending targets, and risk tolerance ensures you enter retirement as a unified team.
3. Running a Rich Ratio Under 1.0
To determine whether someone can realistically afford to stop working, Wes bypasses arbitrary portfolio target numbers and instead points to a straightforward formula he calls the Rich Ratio:
Rich Ratio = Have (Sustainable Monthly Income) ÷ Need (Monthly Living Expenses)
Your “Have” includes all predictable monthly cash flow, including Social Security, pensions, and disciplined withdrawals from your investment accounts.
Your “Need” is what it genuinely costs to fund your day-to-day life and retirement activities.
“Your Rich Ratio is simply your income divided by your need, Have divided by Need,” Wes says. “If $8,000 a month in income is covering a $10,000 a month lifestyle, your ratio is 0.8, and no matter how big the account balance looks on paper, you’re financially strained until that ratio crosses back above 1.”
A portfolio worth $1.5 million might seem substantial, but if your spending burns through it faster than the portfolio can sustainably generate income, you are operating at a structural deficit. Before you step away from your paycheck, your Rich Ratio must be at or above 1.0 — meaning your dependable cash flow cleanly covers your living costs.
4. Overlooking the Long-Term Bite of Inflation
While dramatic, short-term spikes in consumer prices grab headlines, the more dangerous threat to your golden years is the quiet, compounding nature of rising costs over decades.
“Inflation is the quiet retirement killer because it doesn’t necessarily show up as a single bad year,” says Wes. “It compounds silently for decades and erodes purchasing power for anyone whose income isn’t structured to grow alongside it.”
If a basket of goods costs $5,000 a month when you retire at age 65, standard historical inflation will roughly double that cost by the time you reach your mid-80s. Relying strictly on flat, fixed-income sources means your real purchasing power gets halved over the course of a normal retirement. A well-constructed retirement strategy must maintain exposure to assets — such as dividend-growing equities — that have historically outpaced inflation.
5. Taking on Too Much Investment Risk
After extended bull markets, it is easy for investors to become complacent about market volatility. However, shifting from the accumulation phase of your working years to the distribution phase of retirement requires a fundamental change in risk management.
“Markets have been remarkably strong for the past 10 years, but markets don’t know or care when you personally decide to retire, and a multi-year bear market that hits right at the start of retirement can wreck an otherwise solid plan,” Wes cautions.
Wes notes that the remedy is not retreating entirely to cash and missing out on future market growth. Instead, it comes down to smart portfolio structure:
“The fix isn’t avoiding stocks, it’s baking in ‘dry powder’ to your asset allocation. This means having 3 or more years’ worth (of spending) assets held in cash and/or bonds sized to support your income gap, so you’re not forced to sell stock assets during a major correction.”
By holding three or more years of your net living expenses (your spending needs minus guaranteed sources like Social Security) in stable, liquid assets, you create an essential buffer. If a prolonged downturn hits the market, you can draw from your cash and bond reserves to pay the bills, giving your stock portfolio the time it needs to fully rebound without locking in steep paper losses.
Final Thoughts
A comfortable retirement doesn’t require predicting market tops or taking outsized speculative bets. By locking in a mortgage payoff timeline under nine years, getting on the same page with your spouse, keeping your Rich Ratio over 1.0, planning for decades of inflation, and buffering your portfolio with dry powder, you set up a framework designed to protect your wealth and your peace of mind.
The post 5 of the Most Common Retirement Planning Mistakes appeared first on Clark Howard.