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13 Ways You Are Sabotaging Your Retirement

Sabotaging Your Retirement

One of the most significant and confusing parts of being an adult is planning for retirement. Retirement savings and concerns are regularly-talked about issues in the news, and, frankly, the talk is not often brimming with encouraging updates.

In truth, most Americans aren’t anywhere near as on track for retirement as they think they are. While this is a scary thing to consider, there is good news. Some changes you can make right away will help steer you toward a more comfortable future.

Why Save for Retirement?

Many young Americans live under the misguided belief that public services are available for the elderly, so saving for retirement isn’t as urgent a situation as the media portrays or as older generations warn.

There are several reasons behind this:

#1 Retirement might last longer than expected.

We rarely consider the possibility of retiring earlier than planned. However, this is the case for many Americans. Chronic illnesses and other health concerns are leading contributors to early retirement, which means less money saved overall. It also means you have to spread out the little money you saved across more time.

When planning for retirement, you should also have a clear backup plan in place in case life happens and throws you an unforeseen obstacle to navigate before retirement comes.

#2 You’re not paying off bad credit.

Bad credit refers to any high-interest loan that doesn’t provide a return on your investment and is, therefore, a money sink that drains your wallet. Examples of bad credit are car loans (unless you’re using the car to generate revenue and offset the high interest), and most credit card balances if you don’t pay them in full at the end of your billing cycle.

If you’re not prioritizing getting rid of high-interest loads first, then you’re leaving money on the table every month, even if we’re talking about purchases made with a low-interest credit card.

#3 Social Security is rarely enough to cover expenses.

Social Security was once thought of as a way of ensuring every older adult and disabled person in America had the means to survive. Now, it can only be considered supplemental at best—and it’s likely to decrease in value as time goes on!

As the Baby Boomers age into retirement, Social Security will be operating at a greater deficit—paying out more money than they will be taking in from the younger generation’s Social Security contributions. According to the Social Security Administration’s own website, in fact, there is a prediction that benefits may start decreasing in 2034 to make up some of the difference.

#3 Many Americans don’t have a retirement plan.

This year, the Anytime Estimate Retirement Finances Survey found that 37% of American adults surveyed had no plans for retirement. Not only that, but 39% of Americans surveyed don’t have any savings accounts at all.

Sadly, the survey also found that 10% of Americans don’t believe they will ever be financially stable enough to retire comfortably. This is a startling statistic, but it is easily avoidable by taking necessary action now to create a more stable future.

#4 Medicare won’t cover comfortable senior living.

Many assume that if they go into Senior Living as elderly adults, they will have Medicare to look out for them. They don’t realize that Medicare does not cover senior living at all, and government subsidies that help cover the cost are limited.

Most individuals who get their senior living or nursing home care expenses paid by the government do so through state-funded Medicaid programs rather than Medicare. These programs are great for those who need them, but using them often involves having little choice about living accommodations and often sharing a room with another facility resident.


Now that we have a better understanding of why it is necessary to consider your retirement, even decades before the time to retire comes, let’s take a look at some of the ways you might already be sabotaging your retirement efforts.

12 Ways You’re Sabotaging Your Retirement

Many think they’re doing fine in terms of retirement plans but may not realize that they are doing small things that are adding up to big problems. These little things have a significant impact on your nest egg. Here are some of the most common things to avoid, if possible, on the road to retirement.

#1 Not negotiating pay.

People are often nervous about negotiating pay with their employers. This is especially true among young people who are just getting started in their field. However, by not negotiating your pay rate, you are cheating yourself out of some of the money you could already be saving for a comfortable retirement.

Don’t be afraid to negotiate with employers during the interview process. Now is a perfect time to insist on what you are worth, considering that many businesses are complaining of a worker shortage.

#2 Not saving at all.

If you aren’t saving for retirement, you are dooming yourself to a later retirement or no retirement at all without the help of government-funded subsidies, which are unstable and cannot be relied upon.

Often, people think that they cannot afford to save money for retirement because they are already living paycheck-to-paycheck and having difficulty managing their bills. Think about it this way: Would you rather sacrifice some small luxuries now as a young person or be destitute as an old one?

#3 Borrowing from your retirement accounts.

Sometimes, we all have to do things we don’t want to. However, there is a growing trend of treating retirement accounts more like emergency funds when obstacles or opportunities in life present themselves.

If you want a leisurely retirement, you should not borrow from your retirement accounts for things like buying a new car or renovating your home. Instead, try to save for these expenses separately and allow your retirement money to stay put in your account, where it will have the opportunity to gain interest and grow. In addition, you’ll also avoid paying hefty early-withdrawal fees that will eat into your savings.

#4 Not working long enough.

Whether you are late joining the workforce or leaving the workforce early, shorting your working years can create major problems in terms of saving for a comfortable retirement. This is also true for individuals who take time off of work to be stay-at-home parents or pursue other interests.

Experts recommend working at least 35 years before you retire. This is largely based on how the Social Security Administration calculates benefits. The Social Security Administration will value your retirement based on your 35 highest salary years. For every non-working year, you will get a 0 averaged in.

#5 Withdrawing early

Some retirement plans involve owning and managing stocks or bonds. The performance of these stocks can vary year to year, so you should never begin withdrawing early because of a belief that the stocks are performing well enough for you to do so.

For example, if you invested $500,000 in stocks and the markets are doing well, within a few years, you’ll probably have more than your original half a million even if you withdraw, say, 4% annually. This might make you feel you can withdraw even more because your stocks are doing well. Suddenly you’re withdrawing 6% annually, then 7%, and so on. But doing this severely impacts your compounding and could mean the difference between doubling your investment in 10 years and doubling it in 20.

#6 Prioritizing college accounts over retirement savings.

Every parent’s natural instinct is to help their kids first, so it’s not uncommon for parents to invest in college savings for their children before they tackle their own retirement savings.

It’s important to remember that your kids have more time to pay off student loans than you do. Also, they have other opportunities to get their education paid for, including scholarships, Pell Grants, and work studies.

#7 Suffering lifestyle inflation.

It’s not uncommon for individuals to trick themselves out of increased earnings that could help them retire comfortably later on. When people get a raise or find employment that pays more, their first instinct is to splurge and treat themselves to luxury.

You might feel tempted to buy a new car or take on more bills to sustain a more comfortable and lavish lifestyle with your new salary increase. You’d be much wiser to fold at least half of that new “surplus money” into your retirement account.

#8 Carrying too much bad debt.

Recently, a group of oblivious car salesmen went viral on TikTok for all the wrong reasons. One by one, they each disclosed the amount of money they were paying monthly on their car payments. For some, the total was over three grand. This led many commenters to criticize the dealership for trying to normalize high amounts of debt to line their own pockets.

This is a classic example of bad debt because it implies high-interest rates, and the money you put in doesn’t generate any value. In fact, a large chunk of the car’s value is lost the second you drive it out of the dealership. Think about the debt you take on in your life and ask yourself if it is really worth the risk of having less money to live on later in life.

#9 Not taking risks.

While all of these hints are about ensuring a comfortable future, there are times when you should take risks. Often, people fixate on retirement at the expense of giving up better opportunities that could help them save more later.

For example, you might be tempted to stay with your current employer because you have already done the math and know that you will be able to retire with X amount at a certain age. This is security and stability.

However, the desire to maintain this stability will often make you turn down job opportunities that can pay a higher salary or offer a better retirement plan.

By not taking on this bit of extra risk, you may be missing out on the dream retirement that everyone wants.

#10 Renting.

Owning property provides another nest egg for retirement: you can sell your property and downsize when the time is right. If you are currently renting instead of paying a mortgage toward your home and property ownership, you are essentially throwing those monthly payments away.

Another added benefit of owning property—even just a tiny home and lot—is that you will save yourself from paying rent and risking eviction in your later years.

#11 Not seeking or accepting financial advice.

According to a recent study by TIAA-CREF, many affluent Americans agree that, even in their own place of financial security, they still need advice for managing their finances and securing their future wealth. This is a great habit for anyone in any tax bracket to adopt.

By seeking the advice of experts and studying the financial habits of those who have found the key to financial success, we can identify our shortcomings and re-strategize for a better and more lucrative future.

#12 Trading instead of investing.

We have all heard the stories of savvy traders who have made millions playing the stock market. The stories might have fooled you into thinking this is an easy way to rack up retirement cash in a short amount of time. You’d be disappointed to know, though, that most who attempt to grow their savings by trading ultimately lose money. This is because trading isn’t easy. It requires knowing how markets work, choosing the right broker, doing fundamental and technical analysis, and more.

Research consistently shows that buy/see strategies for retirement savings frequently underperform the less risky buy-and-hold method of investing.

The Bottom Line

Most Americans think they are well on their way to a comfortable retirement when, in fact, they’re not. In some cases, it’s because they didn’t start saving soon enough. In others, it’s because they want to retire early. For some, the reason lies in choosing the wrong investment strategy for their savings.

Misinformation, an unstable economy, and higher inflation have all contributed to making the act of saving for retirement more difficult. However, there are several things you can avoid doing now that will provide you with a safety net in terms of setting yourself up for comfort in the twilight years of your life. Owning property, not borrowing from your retirement accounts, investing wisely, and negotiating the terms of your retirement savings is an excellent place to start.

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We uphold a strict editorial policy that focuses on factual accuracy, relevance, and impartiality. Our content, created by leading finance and industry experts, is reviewed by a team of seasoned editors to ensure compliance with the highest standards in reporting and publishing.

Credit Cards Expert
Jordan Bishop discovered the power of credit cards at a young age. His first splash into travel hacking came with the wildly viral launch of Yore Oyster, which landed him national media attention and more than a million frequent flyer miles. He leveraged that opportunity to help tens of thousands of people save millions of dollars on flights, all while globetrotting the world.

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