5 Mistakes People Make in the Final 10 Years Before Retirement
The final 10 years before retirement are often some of the most important financially.
Decisions made during this period can significantly influence not only how much wealth someone retires with, but also how confident and financially secure they feel once they stop working.
Unfortunately, this is also where many people make avoidable mistakes.
Here are five of the most common retirement planning mistakes I see — and why addressing them early can make a meaningful difference.
1. Waiting Too Long to Create a Retirement Plan
Many people focus heavily on building wealth throughout their working life, but delay actually planning for retirement until it’s only a few years away.
The problem is that retirement planning isn’t just about accumulating money. It’s about understanding how that money will support your lifestyle over potentially 20–30 years.
Questions such as:
How much income will you need?
When should you access super?
How should investments change approaching retirement?
What happens if markets decline early in retirement?
all require careful consideration.
Starting these conversations earlier generally creates more flexibility and more available options.
2. Taking Either Too Much or Too Little Investment Risk
As retirement approaches, many people swing too far in one direction with investments.
Some become overly conservative too early, moving entirely into cash out of fear of market volatility. While this may feel safer, it can create long-term issues with inflation and maintaining purchasing power.
Others maintain aggressive investment strategies without considering how market downturns could affect retirement timing or income needs.
The key is ensuring your investment strategy aligns with:
your retirement timeframe
income needs
risk tolerance
long-term objectives
rather than reacting emotionally to market conditions.
3. Missing Valuable Super Contribution Opportunities
The years leading into retirement can provide some of the most valuable opportunities to grow superannuation tax-effectively.
Depending on individual circumstances, strategies may include:
concessional contributions
carry-forward contribution rules
non-concessional contributions
spouse contribution strategies
transition-to-retirement planning
Many people are unaware of how these strategies work or whether they may be suitable for them.
Even small adjustments during the final working years can potentially make a significant difference over time.
4. Entering Retirement with Unnecessary Debt
Carrying large debt into retirement can place pressure on cash flow and reduce financial flexibility.
For many Australians, retirement income is lower than employment income, making ongoing loan repayments more difficult to manage.
While not all debt is bad debt, it’s important to assess:
whether current repayments are sustainable in retirement
how rising interest rates may impact plans
whether debt reduction should become a higher priority before retirement
Creating a strategy around debt management early can help reduce financial stress later.
5. Focusing Only on Finances — Not Lifestyle
One of the biggest mistakes people make is assuming retirement is purely a financial event.
In reality, retirement is also a major lifestyle transition.
Many people spend decades focused on work routines and financial goals, only to discover they haven’t fully considered what retirement life will actually look like.
Questions worth considering include:
How will you spend your time?
What does an ideal week look like?
Will you travel more?
Do you plan to support family financially?
What hobbies or activities are important to you?
The clearer your lifestyle vision becomes, the easier it is to build a financial plan that supports it.
Final Thoughts
Retirement planning is about far more than reaching a particular super balance.
It’s about creating clarity, structure, and confidence for the next stage of life.
The earlier these conversations begin, the more opportunity there is to make informed decisions and avoid costly mistakes later.
If you’re within 5–10 years of retirement, now is often the ideal time to start reviewing your strategy and ensuring your financial plan aligns with the lifestyle you want moving forward.
Disclaimer:
This article contains general information only and does not take into account your personal objectives, financial situation or needs. Before making any financial decisions, you should consider whether the information is appropriate for your circumstances and seek professional financial advice where necessary. Past performance is not a reliable indicator of future performance.