The Mulligan Rule of Retirement — Seven Mistakes You Can Fix

A red reset button on a dark background, demonstrating the Mullilgan rule.

(Image credit: Getty Images)

No one is perfect. We don’t always get it right on the first try — on the golf course or in retirement.

According to one legend, Canadian golfer David Bernard Mulligan once hit a bad tee shot, re-teed and jokingly called it a “correction shot.” His friends embraced the term, and the “mulligan” was born.

Many retirees wish they could do the same. For example, 62% of retirees would like to go back and plan differently for retirement, a Lincoln Financial Group survey found.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free 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.

Today, some take their mulligans literally by unretiring. By late 2024, 20% to 25% of retirees were working part-time or full-time, with another 7% seeking employment, according to a report by the National Conference of State Legislatures. Reasons range from under-saving to higher prices to simply wanting more purpose.

While you can’t go back in time, several retirement choices do allow for a “correction shot.”

“Retirement do-overs are more common and valuable than many realize,” says Patrick Huey, owner and principal adviser of Victory Independent Planning. “Life and markets change fast, but the good news is that there are real ways retirees and pre-retirees can hit the ‘reset’ button, sidestep major mistakes or tweak their plans in light of new information.”

Here are some of the best “Mulligan rules of retirement,” the financial “do-overs” that can help you recover from a rough first swing.

The most popular age to claim Social Security is 66, according to Social Security Administration data, when many people receive their full benefits. While you can claim as early as 62, waiting until 70 can increase your monthly payments by up to 32% through delayed retirement credits — what you might think of as the 8-year rule of Social Security.

If you regret claiming early, there’s potential for a Social Security do-over. If you claimed less than 12 months ago, you can withdraw your application, repay all benefits received, then refile later for a higher amount. Note that you only get this mulligan once in a lifetime.

“I’ve seen clients use this after getting a late job offer or rethinking spending needs — gaining thousands in lifetime benefits,” Huey says.

For more on this do-over read, I Claimed Social Security Six Months Ago at 62, but My Checks Are Too Small. What Are my Options?

2. Medicare mulligans

Health care is one of the biggest costs in retirement, and choosing the right coverage isn’t easy. A recent survey found that 75% of Medicare beneficiaries say selecting a plan is confusing.

“Many folks pick a plan in a rush and don’t realize how easy it is to fix a mistake within these windows,” says Huey.

For instance, every fall during Open Enrollment (and again from January through March for Medicare Advantage) you have a risk-free window to switch plans if premiums rise, your doctor network changes or your health needs shift.

It’s also important to understand how income affects costs. Even $1 above certain thresholds can trigger IRMAA surcharges (Income-Related Monthly Adjustment Amounts), adding hundreds of dollars per month in Medicare Parts B and D premiums.

However, if your income later drops due to a life-changing event such as divorce or the death of a spouse, you can file an IRMAA appeal with the Social Security Administration to have the surcharge reduced.

3. Withdrawal strategy pivots

When it comes to how much you should withdraw from your savings each year, there’s plenty of debate. The long-standing 4% rule has been challenged in recent years, with some arguing that rising living costs in retirement warrant a higher rate. Others advocate for a lower withdrawal rate to offset the risk of outliving your savings.

In other words, withdrawals aren’t set in stone. Some retirees start out too cautiously and withdraw too little, while others take out too much or return to work and need to adjust. That’s why many advisers recommend flexible or dynamic, withdrawal strategies — spending more when markets are strong and easing back during downturns.

This "go live your life" rule of retirement spending can adapt to your needs and market returns.

“There’s no rule against changing your withdrawal rate as life and markets evolve; annual do-overs are just smart planning,” says Huey.

4. Early retirement corrections

For early retirees, there’s plenty of time to change your mind about work or how you fund the years before 59½.

If you leave your job in or after the year you turn 55, you can withdraw money from your employer plan without the 10% penalty under the Rule of 55.

Another option is the 72(t) rule, also known as substantially equal periodic payments (SEPP). It allows penalty-free withdrawals from an IRA or 401(k) at any age, as long as you follow a fixed schedule for at least five years or until 59½, whichever is longer. The trade-off: Once started, you’re largely locked in.

But there are limited exceptions. You can make a one-time switch in how payments are calculated — from one of the fixed methods to the RMD method, which uses IRS life expectancy tables. You can also stop withdrawals altogether, but doing so triggers retroactive penalties on all prior withdrawals, making it a costly “mulligan” few want to take.

5. Annuity free-looks

Buyer’s remorse can apply to annuities, too. Fortunately, annuity contracts often include a free-look period (ranging from 10 to 30 days, depending on the state) that allows you to cancel and receive a full refund.

Some contracts also let you delay income start dates or use a 1035 exchange to switch into a better-fit policy.

6. Beneficiary updates

If you divorce and remarry but fail to update your beneficiary forms, your ex could still inherit your savings, despite what your will states. It’s one of the easiest mistakes to avoid, and one of the hardest to fix.

For many people, there’s little excuse not to keep beneficiary designations up to date on things such as IRAs, 401(k)s, life insurance policies and TOD/POD (transfer on death/payable on death) accounts.

“These designations can be updated nearly any time,” explains Huey. “Doing so ensures assets actually go to the right people, avoiding the heartbreak of a hard-to-undo slip.”

7. Required minimum distribution (RMD) waivers

“For required minimum distributions, it’s common to forget a withdrawal or start from the wrong account,” Huey says.

But there’s a simple fix: If you catch the mistake promptly, you can take a make-up withdrawal, file the appropriate IRS form and often have the penalty waived.

Mulligans, golf and retirement

Golf and retirement make for a clichéd pairing. But the analogy still holds. As rocker-turned-golfer Alice Cooper once said, “Mistakes are part of the game. It’s how well you recover from them that counts.”

The same goes for retirement, where knowing the rules of a good mulligan might keep your financial game on course.