Decades of disciplined saving. And yet — for a surprising number of people — the whole thing starts coming apart right near the end. That final stretch before retirement isn't just another phase; it's where the stakes are highest and the margin for error shrinks fast. People who managed money responsibly throughout their careers sometimes walk into this window and make costly missteps, never quite figuring out what went sideways.
1. Overestimating Investment Returns
Here's a mistake that shows up constantly: assuming the portfolio will keep performing the way it did back in your forties. It won't. Market conditions shift, and those eight-percent annual returns you once counted on might look more like four or five percent as you close in on your sixties. Some investors never touched their asset allocation — kept the same aggressive mix they'd held for twenty years — and left themselves wide open to serious losses at the worst possible moment. That's not just a math problem. It's yesterday's playbook applied to a completely different game.
When a major correction hits within ten years of your target retirement date, there's no real runway left to recover. Lose twenty percent of your portfolio at 62 and the situation is categorically different from the same loss at 35. Watching those numbers drop triggers panic selling in some people — and reckless risk-chasing in others. Both responses tend to dig the hole deeper.
2. Failing to Account for Healthcare Costs
Healthcare costs are retirement's quiet assassin. Many people entering their final working decade haven't seriously run the numbers on what medical care will actually cost them. The shift from employer coverage to Medicare isn't seamless — there are gaps, phases, and out-of-pocket surprises that catch people flat-footed. Long-term care, prescriptions, dental, vision — these get underbudgeted or cut from projections entirely. That's a problem with real consequences.
Someone might land on two million dollars as their retirement target and feel confident. But that figure could fall apart entirely if a serious illness hits in their eighties, or if extended nursing care enters the picture. Medicare doesn't cover nearly as much as most retirees expect. Firms like Asset Preservation offer resources to help people build realistic healthcare cost scenarios — but only if individuals actually engage with that process during this critical window, not after they've already left the workforce.
3. Neglecting to Plan for Sequence of Returns Risk
Sequence of returns risk is one of those concepts that sounds technical but has devastating real-world consequences. Retire in 2007 versus 2009 — same market, completely different outcomes. It's not about average returns over a lifetime. It's about when bad years hit relative to when you stop earning and start withdrawing. That timing alone can determine whether a retirement fund lasts or runs dry. And yet this risk gets misunderstood, glossed over, or ignored entirely.
People in their fifties assume they can weather downturns the same way they always have. But retirement changes the math fundamentally — no paycheck means no buying discounted shares on the way back up. For Phoenix-area residents working through this transition, retirement planning in Gilbert connects people with local specialists who build cash reserves, restructure allocations, and design flexible spending strategies well before clients stop working. Doing this years in advance is infinitely more effective than scrambling after an early withdrawal crisis has already taken hold.
4. Avoiding Difficult Conversations About Social Security
A lot of people drift into their late fifties without ever sitting down to think seriously about Social Security timing. That's a costly drift. Claiming at 62 versus waiting until 70 can mean hundreds of thousands of dollars across a lifetime — yet many people make that call without considering how it fits into their broader financial picture. Married couples face even more complexity through coordinated claiming strategies; few take the time to actually work through those options. Financial advisors hear it constantly: clients in the final pre-retirement stretch never thought about how Social Security interacts with their withdrawal plan.
Running scenarios with a professional during this decade lets you compare real outcomes across claiming ages and income sources. Sometimes it reveals something simple — that working one or two more years would meaningfully change the long-term picture. A proactive approach here prevents years of regret over a choice that can't be undone.
Conclusion
The decade before retirement demands a genuine shift — from building the pile to protecting and distributing it. Most failures in this phase aren't bad luck. They're the result of keeping old strategies in place when the whole context has changed. Address investment risk, healthcare costs, sequence of returns exposure, and Social Security timing while you're still in your fifties and early sixties, and you give yourself a real foundation to stand on. The window to course-correct doesn't stay open forever.