5 Financial Roadblocks to a Secure Retirement
Preparing yourself for these potential pitfalls can help ensure that you're able to afford the life you want after you retire.

Everyone considers, at one time or another, what it would be like to know the future—optimistic that knowing would enable them to make good decisions and avoid common pitfalls along the way. In retirement planning, this is especially true. Preparing for these possible eventualities is the next best thing.
The following outlines five common roadblocks that can disrupt your retirement, so you can plan to avoid them.
Roadblock No. 1: Outliving Your Savings
In a recent poll from Allianz Life Insurance Company, a majority of people approaching or in retirement feared running out of money more than death! Knowing how long you'll live is one of the big mysteries of retirement planning. Thanks to healthier lifestyles and medical advances, life expectancy is increasing. Once you reach age 65, the probability you'll live for 20 or more years is good. And if you reach age 80 or 85 and are in good health, there is still a high probability of living 10 to 15 more years.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Roadblock No. 2: Underestimating How Much Income You'll Need
How much money will you need to live comfortably once you retire? It's a question on every retiree's mind—and a hard one to answer because there are so many variables, such as inflation, stock market performance and unexpected medical expenses.
But this is your life and your retirement. It's critical that you come up with a good estimate of your number to eliminate at least some of your uncertainty. How do you identify that number? The answer lies in your replacement ratio—the percentage of pre-retirement income that will provide you with the same standard of living in retirement. On average, a ratio of about 75% to 80% of your preretirement income is a good starting place. Then, make adjustments based upon decreases in former expenses (e.g., a paid-off mortgage) and any increases in future expenses (e.g., travel). Finally, it never hurts to underestimate income and overestimate expenses or plan for the unexpected (e.g., medical expenses).
Roadblock No. 3: Poor Returns Early in Your Retirement
Investment portfolios naturally rise and fall, but planning on a 6% long-term return is standard, right? Kind of. There is a "sequence of returns" risk associated with an ebb in portfolio value early in retirement. In this case, even if the returns do average what you expect in the long run, the early returns might not sustain your planned lifestyle and cause a diminishment of your base and later returns.
Precautions for this potentiality include counting on a lower withdrawal—say, 4% annually. Belt-tightening during a temporary down market can help as well. You can also consider insurance products that provide guaranteed income or set aside money in conservative financial vehicles to use in case of negative portfolio returns.
Roadblock No. 4: Taking Social Security at the Wrong Time
Should you claim Social Security benefits when you retire, at full retirement age or later? Think you understand Social Security well enough to answer that question? Think again. Retirees are leaving thousands upon thousands of dollars on the table by claiming too soon or failing to coordinate benefits with their spouse.
Several factors that determine the optimum time include your spouse's earnings, when you'll stop working, your savings and your health. Even if you and your spouse are both healthy, normal life expectancy may have one spouse expecting to live longer, so it might be prudent to plan for those potential alone years of a surviving spouse.
Roadblock No. 5: Ignoring the Impact of Inflation
It's important to consider how the value of your money might affect your expenses over time. If you don't factor in the increasing cost of an otherwise steady lifestyle, you will find your savings diminishing as the cost of goods and services increase. The only other alternative is to have an ever-decreasing lifestyle—not a pleasant thought, especially as you consider the challenges already built into our waning years. Planning on 4% inflation—the upper end of the 2% to 4% average over the last several years—could give you more leeway in your planned lifestyle for the duration of your retirement.
Taking these roadblocks seriously can go a long way toward putting you on the path to financial independence.
Scott Dougan is a Registered Financial Consultant, Investment Adviser Representative, licensed insurance professional and founder of Global Plains Advisory Group of Prairie Village, Kansas.
Investment advisory services offered through Global Financial Private Capital LLC, an SEC Registered Investment Adviser.
Steve Post contributed to this article.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

As Founder of Elevated Retirement Group, Inc., Scott Dougan has built a comprehensive retirement planning company focused on helping clients grow and preserve their wealth. Under Scott’s leadership, a team of experienced financial advisers, Certified Financial Planners (CFP®) and CPAs use tax-efficient strategies, professional investment management, income planning and proactive health care planning to help clients feel confident in their financial future — and the legacy they leave behind. Scott has also written a book titled “Exceptional Retirement: Tools and Strategies for Retiring on Your Terms” (click here to request a free copy). You can find Scott on YouTube by clicking here, where he creates educational videos for those near retirement. If you would like to talk to Scott’s team, you can schedule a call by clicking here.
-
8 Rules for Choosing the Right Financial Adviser
Not all advisers are created equal. Here's how to find one qualified to manage your wealth and protect your legacy. From verifying credentials to trusting your gut, follow these rules to find a financial adviser.
-
A Hated TSA Rule Was Finally Phased Out
After nearly 20 years, the TSA is ending its shoes-off policy. Travelers will still need a Real ID, and advanced screening remains in place. Here’s what to expect on your next flight.
-
Financial Fact vs Fiction: Why Your 'Magic Number' Isn't Actually Magical
Do you think you're diversified if you're invested in the S&P 500 and Nasdaq? Do you think your tax rate will fall in retirement? Think again — and read on for other myths that could be leading you astray.
-
Opportunity Zones: An Expert Guide to the Changes in the One Big Beautiful Bill
The law makes opportunity zones permanent, creates enhanced tax benefits for rural investments and opens up new strategies for investors to combine community development with significant tax advantages.
-
Five Ways Retirees Can Keep Perspective Through Market Jitters
Market volatility is a recurring event with historical precedents (the dot-com bubble, global financial crisis and pandemic), each followed by recovery. Here's how people who are near or in retirement can navigate economic uncertainty.
-
I'm a Financial Strategist: This Is the Investment Trap That Keeps Smart Investors on the Sidelines
Forget FOMO. FOGI — Fear of Getting In — is the feeling you need to learn how to manage so you don't miss out on future investment gains.
-
How Advisers Can Steer Their Clients Through Market Volatility (and Strengthen Their Relationships)
Financial advisers need to be strategic when they communicate with clients during market volatility. The goal is to not only reassure them but to also help them avoid rash decisions, deepen your relationship with them and build lasting trust.
-
The Hidden Costs of Caregiving: Crisis Goes Well Beyond Financial Issues
Many caregivers are drained emotionally as well as financially, leading to depression, burnout and depleted retirement prospects. What's to be done?
-
Cash Balance Plans: An Expert Guide to the High Earner's Secret Weapon for Retirement
Cash balance plans offer business owners and high-income professionals a powerful way to significantly boost retirement savings and reduce taxes.
-
Five Things You Can Learn From Jimmy Buffett's Estate Dispute
The dispute over Jimmy Buffett's estate highlights crucial lessons for the rest of us on trust creation, including the importance of co-trustee selection, proactive communication and options for conflict resolution.