This Single Retirement Mistake Could Drain Your Savings, Warns Expert Farnoosh Torabi
Financial expert Farnoosh Torabi breaks down the costly retirement mistake most retirees ignore and how to fix it before it hurts your savings.
Retirement is supposed to be a time to kick back and unwind, so who can blame you for not having everything figured out? Big decisions — like whether to age in place, work part-time, or pass on wealth while living — often feel like choices that can wait. After all, retirement can last 30 years, giving you plenty of time to mull things over.
Or does it?
According to Farnoosh Torabi, financial strategist and host of the So Money podcast, endless rumination can actually trigger a retirement shortfall.
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"It's the refusal to change anything until life forces it upon us," Torabi told Kiplinger in an exclusive interview. "We remain in a house that no longer serves us. The estate plan remains unreviewed or untouched, and the conversation with adult kids never quite happens."
The root of this inertia varies. For some, it’s emotional avoidance — facing these decisions can feel like confronting one's own mortality, Torabi notes. For others, it's sheer procrastination. After all, who wants to update a will when you could plan a bucket-list trip instead?
Either way, delaying these key moves can cost serious cash and jeopardize your financial security down the road.
The hidden financial penalty of inaction
Take your home, for starters. Delaying downsizing means property taxes, upkeep, utilities, and maintenance will quietly eat into your retirement savings. Plus, if bedrooms are upstairs or hallways are too narrow for limited mobility, you could face costly emergency renovations down the road.
The same goes for an outdated estate plan, which can lead to probate delays, unexpected taxes, or assets going to the wrong heirs entirely.
Pushing off these decisions often turns manageable choices into costly emergencies.
"When the crisis finally hits — be it a fall, a diagnosis, or a partner's decline — decisions that could have been made calmly get made in a panic. You sell your home fast. You move into care you didn't shop around for," she said. "Denial comes at a cost."
Build your retirement 'dream team' before a crisis hits
To keep curveballs from throwing your retirement off course, Torabi recommends tackling these choices head-on while you are still in control. A great first step is realizing you don't have to do it alone and that everyone from your adult children to financial advisors can help map out the next 10 to 20 years.
To stay ahead of potential issues, have conversations with your adult kids now, revisit your estate plan regularly, and consult with real estate, tax, and financial professionals. A local agent can help you evaluate what your home is worth now versus in the future, as well as the tax implications of selling. Meanwhile, a trusted financial adviser can craft a withdrawal strategy that matches your lifestyle.
"Think about building your team early, when you don't need them yet," Torabi says. "That includes a financial planner, an estate planning attorney, and a real estate agent who knows your local market."
And if the scope of it all feels overwhelming? Start small. "Before you downsize your life, downsize one closet," Torabi says.
The runner-up mistake: retiring your earnings potential too soon
Many people nearing retirement view the transition as a finish line — the end of both their careers and their income. They did their job, saved up, and can finally stop working. But according to Torabi, that assumption is actually the runner-up biggest retirement mistake.
"While many of us are so tired of working long hours by our 60s, let's not throw the proverbial baby out with the bathwater," she says. "We're living longer than any generation before us, which is great, but it also means our money needs to stretch further."
Continuing to earn even a small income in retirement gives your existing savings more time to compound, while providing a buffer against inflation at the grocery store and gas pump.
Working in retirement isn't just a financial play, either. Staying engaged provides a sense of purpose that studies link to lower rates of depression, reduced heart attack risk, and longer lifespans. Ultimately, better overall health translates directly to lower medical bills.
"Purpose is not a nice-to-have in your retirement; it's practically preventive medicine," Torabi says. "My advice is not to view retirement as the end of work. It can mean the start of work on your own terms. Think: consulting, mentoring, teaching, or turning a hobby into modest income."
Don't wait for the crisis to force your hand
Whether you are already retired or approaching the finish line, letting hesitation or denial paralyze your planning can undermine both your quality of life and your nest egg.
Take some advice from Torabi and don't wait for a crisis to force your hand. By taking proactive steps today, you can protect your savings, maintain your independence, and ensure your retirement is defined by choice, not financial regret.
Editor's note: This article is part of an ongoing series in which we ask influential personal finance figures to share their opinion on the biggest retirement mistake you can make. Other articles feature Suze Orman, Dave Ramsey, Grant Cardone and Ramit Sethi.
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