8 Worst Pieces of Retirement Advice Ever

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Work until you die — quite literally — was the American approach to retirement until the passage of the Social Security Act of 1935. That law established an official retirement age, providing a clear marker for when the next chapter of your life could begin.

But that didn’t mean the end of bad advice; it's been flourishing ever since, costing Americans untold sums in get-rich-quick schemes and fly-by-night stocks.

How much? A lack of financial literacy cost the nation $243 billion in 2024 (National Financial Educators Council). On a personal level, this susceptibility to bad advice has resulted in many individuals losing their entire savings.

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The bad advice runs the gamut from the subtle to the outlandish. To help you spot the scams and avoid the pitfalls, we went straight to the source. We polled global investment firms, personal finance gurus, and financial advisers, asking them one question: What is the single worst retirement advice you've ever heard?

Here's what they told us….

1. 'Manifest abundance'

The worst retirement advice ever? For Nancy Gates, lead educator and financial coach at Boldin, it’s “Manifest Abundance.”

Popular with Millennials and Gen Zers, manifesting is the practice of making a desired outcome — such as an abundance of money — a reality through intense focus, visualization and firm belief that it will occur.

“Forget saving, forget planning — just manifest abundance and let the universe provide. Because who needs a budget when you have cosmic karma,” says Gates.

Manifesting abundance won’t work for a plethora of reasons. For starters, it’s all magic and zero math. Plus, Gates points out that it lacks a tangible plan.

A better idea is to come up with a budget and a savings strategy and get to work putting away money for retirement.

2. 'Put everything in this one stock, it’s the next big thing'

The one piece of advice that makes Nilay Gandhi, CFP, senior wealth adviser at Vanguard, cringe is when he hears, “Put everything in this one stock — it’s the next big thing.”

Why? By going all-in on a single stock, you’re risking your entire financial future on hype over fundamentals, says Gandhil. “That’s not investing, that’s gambling with a tuxedo on.”

Even worse is when the advice comes from someone who stands to benefit, like those too-good-to-be-true stock tips that turn out to be pump-and-dump schemes.

“A better approach is to diversify across asset classes and sectors, do your due diligence by looking at financials, competitive positioning and long-term prospects, and then consider how each investment fits into your overall strategy,” said Gandhi.

3. 'Liquidate your nest egg for a passion project'

Seize the day is great advice, but some retirees take it to the extreme and liquidate their entire nest eggs to pursue a passion project, say, opening a comic book store or restaurant, without thinking of what could go wrong.

“It’s exciting to spend your retirement pursuing a hobby you love, and it can give you purpose and keep you mentally active,” says Michael Conrath, chief retirement strategist, J.P. Morgan Asset Management.

“However, it’s important to remember that running a business comes with upfront and ongoing costs, such as rent, insurance, payroll and inventory. The risks and unpredictability could jeopardize your entire savings.”

Instead of buying a comic book shop, Conrath says to consider working part-time or volunteering at a local store. You can enjoy your passion without blowing your retirement savings.

4. 'Put it all into a life insurance policy that would give you tax-free income'

Suze Orman, the New York Times best-selling author of "The Ultimate Retirement Guide for 50+," has heard it all. A personal finance expert for decades, countless people have come to her for help after getting bad advice from really bad people.

The worst financial advice she heard came from a financial adviser who suggested a woman withdraw her entire $1 million pretax retirement account, pay taxes and buy a life insurance policy that would give her “tax-free income.”

“Are you kidding me?” says Orman. “When someone recommends that you do something that doesn’t make logical sense but benefits them financially, that’s not advice — that’s a sales pitch. Always ask: Who does this really serve? If the answer isn’t you, walk away.”

5. 'All you need are fixed indexed annuities'

Peace of mind is priceless, unless you're purchasing a fixed indexed annuity, says Denny Artache, president and CEO of Artache Financial Group. He ranks these annuities among the worst advice retirees receive, despite their presentation as a safe and smart way to grow money.

“In theory, they look great in volatile markets, but when all is said and done, a 2% to 3% return is the reality,” said Artache, noting that with annuities, your money is locked up, and to access it early, you’ll have to pay penalties and fees.

“These vehicles are primarily for those who want guaranteed income for life and are for investors who are willing to trade off inflation growth or market gains,” Artache said. Investors need to know there are other alternatives available that may not have too much risk and provide more liquidity.

6. 'Gold is the only safe investment'

Gold has long been viewed as a safe haven, so it's no surprise that it has its fans. But Pam Krueger, founder and CEO of Wealthramp, found it dubious when she heard a self-described market expert repeatedly advise retirees to liquidate their entire 401(k) and invest solely in gold, claiming it was the only safe investment.

“The reasoning was that gold would never lose value, which of course turned out to be spectacularly wrong,” said Krueger. “People who followed that advice locked in tax penalties, lost diversification and missed years of growth. What they thought was safety turned into a slow-motion loss of purchasing power.”

Krueger said that this type of advice is a perfect reminder that fear sells, making retirees especially vulnerable to persuasive sales tactics.

“Real fiduciary advice starts from facts and planning, not panic,” says Krueger.

7. 'The FIRE movement without the proper calculations'

The Financial Independence, Retire Early or FIRE movement has its allure: Save and invest aggressively so you can retire well before the average retirement age of 62. While the movement advocates a modest lifestyle once you retire, it's not always what it's cracked up to be, says Christopher R. Manske, a certified financial planner and president of Manske Wealth Management.

He recalls a single father of one daughter who got very interested in the FIRE movement. Through a newsletter and vlog, he received advice that he could fully retire at 32 because his lifestyle was so modest that his nest egg would cover it for the rest of his life.

“Unfortunately, none of the calculations they’d used included inflation or the added cost of a successful high school teenager’s extra-curricular activities,” said Manske.

“When he tried to get back into the workplace, his résumé looked very odd with that long break, so he had to spend principal to stay afloat. Finally, he found work again at a much reduced level and had to start from scratch in his early forties.”

8. 'You can always start saving later'

In this AI-driven world, we would be remiss if we didn't ask ChatGPT for what it thought was the worst advice out there. After some prodding and a little bit of begging the large language model (LLM) not to give me long-winded, paragraph-type answers, ChatGPT settled on this for the worst advice on the planet: “You can always start saving later.”

While ChatGPT said it might sound harmless, it can destroy your financial future if it means you can't save enough for your retirement.

"Time is the most powerful factor in building retirement wealth, and once it’s gone, you can’t buy it back. Every year you delay costs you exponentially more in missed compound growth," said ChatGPT.

Not too bad for a computer.

Mistakes happen, but avoid the doozies

Mistakes can happen on the journey to retirement, but it's the big ones that are important to avoid. They can put your goals further out of reach or worse, wipe out your entire nest egg.

The good news is you don't have to learn the hard way: You can benefit from the wisdom of those who came before you by avoiding these nine mistakes.

Donna Fuscaldo is the retirement writer at Kiplinger.com. A writer and editor focused on retirement savings, planning, travel and lifestyle, Donna brings over two decades of experience working with publications including AARP, The Wall Street Journal, Forbes, Investopedia and HerMoney.