There’s a small but growing group of retirees who don’t fit the typical narrative.
They didn’t earn Silicon Valley salaries or inherit wealth. Instead, they spent decades doing the right things: Saving diligently, avoiding lifestyle creep and sticking to a plan. Many also have something increasingly rare: A pension (I wrote a book about this group — you can request a free copy here).
Combine a pension with $1 million or more in savings, and you’re in what we call the 2% Club. It’s a strong financial position, but it comes with its own set of blind spots.
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After working with these retirees, I saw a pattern emerge: Their biggest regrets were about missed opportunities, inefficient strategies and habits that no longer serve them in retirement.
Here are the most common mistakes and how to avoid them:
1. Staying too frugal in retirement
The very behaviors that helped you build wealth — discipline and frugality — can become liabilities in retirement.
Many retirees struggle to “flip the switch” from saving to spending. Even with a pension covering core expenses and a seven-figure portfolio, they hesitate to enjoy what they have.
The result? Delayed travel, postponed experiences and, in some cases, the realization that health or time has become the limiting factor, not money.
Retirement isn’t an infinite window. The early years, when health and energy are highest, are often the most valuable.
A “spending plan” should give you permission to enjoy your money, not just save it.
2. Working longer than necessary
We often see retirees who could have stepped away earlier but didn’t, either out of habit, the fear of healthcare costs or uncertainty about whether they had “enough.”
In hindsight, the regret isn’t financial; it’s the lost time.
This doesn’t mean everyone should retire early. It does mean you should run your numbers to see how possible this could be.
With proper planning, covering a few years of private health insurance or bridging to Medicare may be far more feasible than expected.
Now, on the flip side of this, we have seen people retire too early and run into trouble. Not financial trouble, but emotional trouble from not having a purpose in their retirement years.
They’ve lost the daily connection they had to others at work and the drive to live a fulfilling life.
My biggest advice, whether you retire early or not, is to ensure you think this through to have a plan for how you spend your later years with the most joy.
3. Having all their money in tax-deferred accounts
A large concentration in 401(k)s, IRAs or similar accounts is common and often encouraged during working years.
However, in retirement, this can create what many call a “retirement tax time bomb.” Required minimum distributions (RMDs), combined with pension income and Social Security, can push retirees into higher tax brackets later in life.
It also limits flexibility; every dollar withdrawn is taxable.
Tax diversification matters just as much as investment diversification. Having a mix of tax-deferred, taxable and tax-free (Roth) assets allows you to control your income strategy, manage tax brackets and reduce lifetime tax liability.
4. Giving to charity the wrong way
Many retirees are generous but not always strategic. Writing checks from a bank account may feel simple, but it often misses key tax advantages.
With today’s higher standard deduction, most retirees receive little tax benefit from those gifts.
More efficient strategies may include:
- Qualified charitable distributions (QCDs). For those 70½ and older, donating directly from an IRA can satisfy RMDs and avoid taxable income
- Donor-advised funds (DAFs) allow you to “bundle” donations into a single tax year to maximize deductions.
5. Taking withdrawals without a plan
Generating income from a portfolio isn’t as simple as “taking what you need.”
Without a strategy, retirees may withdraw from the wrong accounts at the wrong time, triggering unnecessary taxes or increasing the risk of running out of money.
Questions that should be answered include:
- Which accounts should you draw from first?
- How do market conditions affect withdrawal decisions?
- How do you minimize taxes while maintaining a consistent income?
A coordinated withdrawal strategy can increase both the longevity of your portfolio and the amount you can spend.
6. Not running the right analysis
Many retirees make decisions based on assumptions rather than analysis.
- Can you spend $80,000 per year safely?
- Should you convert to Roth?
- How much can you gift to family?
These are the questions we hear that many do not want to guess on. They want to run their numbers and forecast the future through comprehensive planning that factors in taxes, market returns, longevity and their goals. It also helps answer one of the most important questions in retirement: Can I enjoy it?
Most of the people we serve in the 2% Club have financial freedom, so we often tell them to either spend, gift to loved ones or give more to charities after we run their retirement analysis. After all, you cannot take it with you!
7. Failing to prepare for wealth transfer
Even retirees who don’t prioritize leaving a legacy often end up doing so. Especially those with pensions and $1 million or more saved.
Without proper planning, that transfer can create unnecessary tax burdens or lead to outcomes that don’t align with your values. Common gaps include:
- Outdated or missing estate documents
- No strategy for managing the “widow’s penalty” (when a surviving spouse faces higher taxes)
- A lack of communication with heirs
- No tax planning for beneficiaries
And remember, the most effective plans don’t just transfer wealth; they prepare the next generation to handle it responsibly.
For example, many of our clients like working with our team to ensure we can help their spouse and/or children have everything established. They can have a team to ensure they make the right decisions.
We always encourage working with a team with whom both spouses are comfortable and also a team who works with their children.
The bottom line
If you’ve built a retirement with both a pension and significant savings, you’ve already done the hard part. The next phase is about optimization, not accumulation.
That means shifting from that saver’s mindset. It means being intentional about taxes, income, timing and legacy.
Most importantly, it means aligning your financial plan with the life you actually want to live.
In the end, the biggest retirement regret isn’t running out of money. It’s not fully using what you have and doing what I call “running out of life.”
