Retirement Planning Mistakes: 4 Errors Most Early Retirees Make

By Dieter Scherer

Mistake #1: Not planning for health insurance costs before Medicare kicks in.
How are going to pay for health insurance before Medicare kicks in? You generally can’t apply for Medicare benefits before age 65. Most people get health insurance through their employer and porting your health insurance through COBRA is expensive and only available for up to 18 months after you terminate employment. So make sure you have a plan in place to take this into account.

Mistake #2: Failure to plan for how much will you need each year.
People generally need more during retirement than the often stated 70% income replacement ratio offered up by many as the gold standard. In practice, I usually see most people spending close to 100% of their pre-retirement income. Most people grossly underestimate the amount of money will need each year, especially when they retire early and are much more active with travel and other activities.

Mistake #3: Not owning equities in your portfolio.
Simply put, not owning equities in your portfolio will set you up for failure during retirement, especially when you retire early. With interest rates close to zero right now, CDs and bonds will not give you the returns you need to have your portfolio survive all the way through retirement.

Mistake #4: Applying for Social Security at the wrong time.
Most people apply for Social Security as soon as they are eligible. If you retire early it might make sense to take Social Security so that you have a larger income each month, but the fact is you need to consider a whole lot of other factors before you apply. These include how long you are expected to live, whether your spouse is eligible for benefits, how much your spouse and you can expect to receive each month and your other sources of retirement income.

To answer these questions I’ve made a free video course available over at The free course goes through the future of Social Security, the rules of Social Security, and how to maximize Social Security benefits.

Wayne Zussman is a Certified Financial Planner™ and President of Triton Wealth Management, a fee-only financial planning and investment firm. Triton has offices in Annapolis, Kent Island and Gaithersburg, MD. Wayne can be reached at 410-202-2110 or