Avoiding the 5 Biggest Retirement Pitfalls, Ep #271

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Retirement is the beginning of a new chapter, full of opportunity, challenges, and critical decisions about your financial future. Protecting your retirement means understanding and proactively managing the most significant risks you’ll face. On the show this week, I explore the five biggest risks to a secure retirement and outline strategies to help you and your family prepare for the road ahead.

Outliving Your Money

Most people underestimate how long their retirement might last. According to Social Security actuarial data, a 65-year-old man has a 50% chance of reaching age 84; for women, it’s 87. For couples, there’s an even chance at least one partner will live past 90, and a one-in-five chance one will reach 95. Planning for “average life expectancy” isn’t enough—by definition, half of retirees will outlive that average. Structure your retirement plan and savings to last up to 30 years.

Market & Sequence of Returns Risk

Future investment returns are unknowable, especially as you near retirement. The sequence of those returns—the order in which market ups and downs occur—can determine whether you run out of money. A retiree who encounters a bear market early in retirement is far more vulnerable than someone hit with poor returns later on. I recommend you:

  • De-Risk Your Portfolio Before Retirement: Gradually shift to safer assets in your final working years.

  • Build a Cash Buffer: Maintaining three years of living expenses in cash or similarly stable assets lets you weather bear markets without selling investments at a loss.

  • Stress Test Your Retirement Date: Can you still retire if the market drops 30% the year before retirement?

  • Adopt a Flexible Withdrawal Plan: Use guardrails—predefined spending increases or cuts—to respond to market conditions.

Health and Long-Term Care Risk

Healthcare costs are one of the largest and least predictable components of retirement expenses. About 70% of people turning 65 will need some form of long-term care, which can cost upwards of $75,000–$130,000 per year, depending on the type of care. Critically, Medicare does not cover most long-term care needs. Evaluate whether you can self-insure or if you need to purchase long-term care insurance. Your decision window closes in your 50s and early 60s.

Decision and Fraud Risk

The risk of making poor decisions—especially under stress—or falling victim to fraud is rising. Cognitive decline can begin well before it’s noticeable, and with the rise of AI, scams are more convincing than ever. Put defensive measures in place, maybe add trusted contacts to your accounts, update power of attorney and beneficiaries, and set a family code word to combat scams involving cloned voices.

Inflation Risk

Over a 30-year retirement, even a modest inflation rate can erode your purchasing power by half. At 3% inflation, today’s $60,000 lifestyle will require $120,000 in just 24 years. We all need to plan for rising costs, so periodically review and adjust your projections and spending patterns as prices change.

Outline of This Episode

  • [05:41] Optimizing Social Security Strategy
  • [09:52] Managing Retirement Portfolio Risks
  • [13:08] Planning for long-term care costs
  • [14:47] Assessing long-term care options
  • [19:20] Preparing family financial safeguards
  • [21:50] Preparing for future challenges

Resources Mentioned

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Podcast Disclaimer:

The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the US Securities and Exchange Commission in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

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About the author, Scott Wellens

Scott Wellens, CFP® is an investment advisor and founder of Fortress Planning Group. After earning his Bachelor of Science degree from the University of Wisconsin-Oshkosh, Scott quickly ascended to become a Vice President of North American Sales at a major regional provider of telecommunications infrastructure. While financially successful in this role, Scott searched for ways to pursue his passion related to financial literacy and providing financial freedom for both his own family and others. During his search, Scott became curious about the significant gap he found in the financial services sector: he was unable to find a comprehensive financial planner that maintained a family stewardship lens without being attached to financial products. Scott decided to fill that gap by creating his own planning firm that maintains a strong passion for comprehensive, unbiased wealth planning that is genuinely client-centered.

Scott resides in Menomonee Falls, WI with his family. He is the father of three active and independent daughters who keep him on his toes. Scott is an active community member, serving on the Hamilton Education Foundation Board, serves as a Dave Ramsey Financial Peace facilitator and leads the All Pro Dad’s group at their local elementary school. Scott enjoys spending his free time visiting state parks with his family, reading, and watching the Milwaukee Bucks and the Green Bay Packers win ball games.

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