The problem isn’t that people don’t save for retirement. There’s another mistake that Kyle Wurtzel, a partner and private wealth advisor at Northwestern Mutual, has seen play out countless times with clients: They think retirement will be way cheaper than it actually is.
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“One of the biggest mistakes I see middle-class retirees make is assuming their spending will significantly decrease in retirement,” Wurtzel explained. “While it’s easy to believe expenses will drop dramatically, the reality is they often stay the same or even increase.”
Why Retirement Expenses Don’t Disappear Like You Think
It makes sense to think this way. No more commuting costs, work clothes or daily lunch expenses. But Wurtzel said other costs quickly fill that gap.
“Travel, healthcare, supporting adult children or grandchildren and simply having more free time to spend can all stretch a budget,” he said. “If your retirement plan doesn’t account for that, you may find your savings falling short faster than expected.”
The numbers prove his point. According to Northwestern Mutual’s 2025 Planning & Progress Study, Americans believe they need $1.26 million to retire comfortably in 2025. Very few middle-class retirees are actually planning to hit that target.
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What To Do Instead of Wishful Thinking
Wurtzel’s solution is simple. Get realistic about your actual retirement lifestyle, not your hoped-for budget cuts.
“Instead of underestimating your future expenses, build a retirement plan based on your actual lifestyle goals,” he advised. “That means accounting for inflation, long-term care and how you want to spend your time, not just how you hope to save money. The more realistic your outlook, the more secure your retirement can be.”
The Other Mistakes Middle-Class Retirees Make
Thinking retirement will be cheaper isn’t the only mistake that can cost middle-class retirees.
Going It Alone Too Long
The second major error Wurtzel sees is people waiting too long to get professional help. Some people also think they don’t need an advisor once they retire.
“Another common mistake we see is waiting too long to start working with a financial advisor or assuming you no longer need one once you’ve reached retirement,” he said.
Retirement planning is way more complicated than just saving money. Wurtzel said it involves balancing multiple moving parts that most people have never dealt with before.
“Addressing retirement concerns and financial preparedness requires a personalized, comprehensive approach to financial planning that considers both the accumulation and protection of wealth,” he said. “A financial advisor can play a crucial role in helping individuals navigate these complexities, identify blind spots and create tailored plans that align with their unique goals and circumstances.”
Banking on Social Security as Your Main Plan
The third mistake hits close to home for many Americans. They view Social Security as their primary retirement income source. Wurtzel said this approach is both risky and limiting.
“Don’t assume Social Security will be enough,” he said. “It is designed as a safety net, not your entire plan.”
Social Security benefits alone won’t cut it. Another issue to consider: when exactly you should start taking benefits. The timing decision can majorly impact your monthly income throughout retirement.
“There’s also the decision on when to take Social Security which can significantly impact monthly income in retirement,” Wurtzel noted. “Advisors can help people run the numbers, weigh options and make the decision that’s best for their specific situation, especially if they’re balancing other retirement income sources.”
Building a Retirement Plan That Actually Works
Wurtzel focuses on diversification and realistic planning rather than hoping for the best. He knows Social Security’s future remains uncertain. That makes backup plans even more important.
“Social Security might look different years from now when you’re ready to retire, but, with a larger holistic retirement plan in place, you can avoid relying on it as your sole income source,” he explained.
His recommended strategy involves multiple income streams and protection strategies that work together.
“A diversified mix of savings, investments and protection strategies like guaranteed income or long-term care coverage can go a long way in building peace of mind,” Wurtzel said.
The Bottom Line on Retirement Reality
Wurtzel’s message is clear. Successful retirement planning requires honest assessment of your future needs, not optimistic assumptions about future savings. The middle-class retirees who struggle most are often those who planned based on what they hoped retirement would cost rather than what it actually costs.
You can avoid the most common retirement planning pitfalls by building realistic expense projections, getting professional guidance and creating diversified income streams beyond Social Security.
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This article originally appeared on GOBankingRates.com: I’m a Northwestern Mutual Advisor: Here’s the No.1 Mistake Almost All Middle-Class Retirees Make
