My 2 Worst Retirement Mistakes

December 8, 2025 — In my 19 years of writing these Topretirements Blogs there has been an amazing number of great questions and comments from our Members. So I have had plenty of time to think about the best ways to plan for retirement, and the worst ways. Tackling the negative side, here are my two worst retirement mistakes. In the grand scheme of things, they are not so bad, compared to many more worse ones I could have made.

1. Not contributing enough to Roths.

At the time it seemed like a no brainer – contribute to my IRA or 401(k) plan so that I always got the maximum match, or put in the most I could afford if there wasn’t a match. Put in $10,000, get a $10,000 deduction on our income tax. But, as I am finding out in my late 70’s, that bird comes home to roost in the form of Required Minimum Distributions (RMDs).

Anyone who hits age 73 must start taking out these RMDs every year. They start out fairly modest (3.77% of your IRA/401(k) balances), but go up every year from there. At age 100 you must take out 15.63%, if you are fortunate to live that long. I have been taking out RMDs since age 70 since I was under a previous iteration of the rules.

The problem with regular IRAs and 401(k)s is that the money you take out from RMDs or other withdrawals is taxed. Take out $20,000, you just increased your ordinary income $20,000, which might possibly double your Medicare Part B premiums. Roth retirement investments and earnings, on the other hand, can be taken out tax-free. And you are not required to withdraw anything. True, you didn’t get to deduct those Roth contributions when you made them. But more than balancing that out is the happy situation that all of your contributions and their investment gains over the years are eventually going to come out tax free.

Bottom line here: I wish I had contributed the max allowed to Roth plans over what I put into regular IRAs and 401(k)s. There is a way to avoid adding those withdrawals to taxable income by contributing them to qualified non-profits (maximum of $108,000). But if you need the money to live on there is going to be a big tax bill. As an example, 3.77% of $1,000,000 is $37,700 – and that goes up every year you get older.

2. Not taking Part D insurance at age 65

What was I thinking (obviously, not much)! Part D of Medicare, prescription drug insurance, should be taken out when you qualify for Medicare at age 65, The premiums are modest: the national average for a standalone plan to be around $34.50 to $39 in 2026. Many Medicare Advantage premiums have a $0 premium. But, if you don’t opt for coverage, there is a permanent late enrollment penalty added to your monthly premium. That is calculated as 1% of the national base premium (around $39 for 2026)  for each full month you didn’t have coverage or equivalent insurance. That’s 1% penalty per month, and it adds up quickly.

I finally wised up and got a Part D policy around the age of 70. My mother was in the same situation (I urged her to get in at age 100), so I should have known better!

Bottom line

These are the 2 worst retirement mistakes I think I have made. Fortunately, they are not nearly as bad as some others that can be made. The number 1 retirement error is, of course, not saving enough and/or starting too late. Unfortunately, there are many others that can make it harder to have a great retirement. See Avoid These Retirement Wrecking Mistakes for more ideas.

Comments? What are your biggest retirement mistakes. Please share them so others can be aware of the pitfalls.