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4 Warning Signs Your Retirement Plan Isn't Ready for the Long Haul Thumbnail

4 Warning Signs Your Retirement Plan Isn't Ready for the Long Haul


Let me start with a quick story.

You're sitting on the exam table. Your doctor checks your vitals, runs a few labs, and says you're fine. But you know there’s something wrong—you’ve been limping for weeks. A hidden fracture. You ignore it, hoping it will heal on its own. Months go by, it worsens, gets infected, and now you're in the ER.

What does this have to do with retirement planning? Everything.

Financial blind spots—especially the ones we hide from ourselves—can quietly build until they become crises. After four decades in this business, I can tell you this: the biggest retirement risks often aren’t about the markets. They’re about denial. If you want your money to last 20, 30, or even 40 years in retirement, here are four warning signs that your plan may not be as ready as you think.


Warning Sign #1: You’re Underestimating Your Expenses

Let me introduce you to Ron and Rhonda Retiree. On paper, they were set. Their portfolio looked strong, and they planned to withdraw about 5% annually—well within what many consider a sustainable range.

But then reality set in.

They started calling for extra withdrawals—nothing outrageous, just things they hadn’t planned for: a boat repair, an impromptu trip, a grandchild’s graduation gift. Over time, their annual withdrawal rate crept up… 7%, then 10%, and eventually 15%. At that rate, their retirement savings wouldn’t last two decades, let alone three.

Older households consistently underestimate discretionary spending. According to the U.S. Bureau of Labor Statistics, retirees allocate a surprising portion of their budget to non-essentials like travel, dining, and entertainment—and inflation has driven those costs higher year after year [[Bureau of Labor Statistics, 2024]].

If your budget only covers the basics, you’re not accounting for how you really live. That’s a dangerous oversight.


Warning Sign #2: You’re Overestimating How Long Your Portfolio Will Last

The average American turning 65 today can expect to live nearly 20 more years—and many will live much longer [[Social Security Administration, 2024]]. That’s a long time to draw income, especially if you're pulling more than you planned.

Many retirees assume they can simply “dip in” to their nest egg as needed, without recognizing the compounding effect of withdrawals during down markets or rising expenses. A 5% draw rate may work for some. But 10–15%? That almost guarantees you'll outlive your money.

You have to plan not just for a retirement, but for a long retirement. And that requires realistic assumptions about both spending and market performance.


Warning Sign #3: You Forgot to Plan for Lifestyle and One-Time Costs

Another red flag? When your plan only includes day-to-day expenses but ignores the real-life costs that always come up.

A new roof. A new car. Helping your adult kids with a down payment. A once-in-a-lifetime anniversary trip. These aren’t extravagant—they’re human. But they also need to be accounted for in your plan.

In my office, we walk through these items in detail with clients. We build in buffers for one-time expenses. We ask about goals, not just needs. Most people’s retirement lifestyle costs more than they think—and failing to include these extras can destroy an otherwise sound plan.


Warning Sign #4: You’re Not Stress-Testing Your Income Sources

If you’re relying too heavily on any one source of retirement income—especially Social Security—you may be setting yourself up for disappointment.

Right now, Social Security still provides a significant income stream for many retirees. But the 2024 Trustees Report warns that unless Congress acts, the trust fund may only be able to pay full benefits until the early-to-mid 2030s [[Social Security Administration, 2024]].

Meanwhile, other income sources—like pensions, investment portfolios, part-time work, or rental income—should be assessed for reliability and flexibility. What happens if your portfolio has a bad year? What if inflation spikes again?

Stress-testing your income sources under different market and longevity scenarios is critical. It's not pessimism—it’s preparation.


The Bottom Line: Don’t Let Denial Derail Your Retirement

One couple came to me knowing they were in trouble. Their plan required 15% withdrawals annually—an unsustainable pace. But because they were honest, we could build a strategy that extended their runway. It wasn’t a miracle cure, but it was far better than ignoring the problem.

You can’t fix what you won’t face. Whether you’re 60 and two years from retirement or 45 and still building your nest egg, now is the time for clarity—not wishful thinking.

I’ve been doing this work since 1995. I’ve helped people retire with confidence—and I’ve helped others who came in too late, just trying to minimize the damage. In both cases, the first step is the same:

Be honest with yourself. Be honest with your planner. And build a plan that’s ready for the long haul.


Bibliography

  • Social Security Administration. “2024 OASDI Trustees Report.” 2024. https://www.ssa.gov/OACT/TR/2024/
  • U.S. Bureau of Labor Statistics. “Consumer Expenditures in 2023.” 2024. https://www.bls.gov/news.release/cesan.nr0.htm
  • Centers for Disease Control and Prevention. “Mortality in the United States, 2023.” NCHS Data Brief, 2024/2025. https://www.cdc.gov/nchs/products/databriefs/db495.htm

    • Investment advisory services offered through Osaic Advisory Services, LLC (Osaic Advisory), a registered investment advisor. Osaic Advisory is separately owned, and other entities and/or marketing names, products, or services referenced here are independent of Osaic Advisory.