Retirement planning is full of unknowns, from how long you’ll live to how much you’ll spend. Even diligent savers may be making costly mistakes.
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A new Charles Schwab survey of 401(k) participants reveals the major misconceptions Americans have about retirement in 2025. Here’s what they are, and how to correct them.
Misjudging How Much You’ll Need
On average, workers expect to retire at age 66 and believe they will need $1.6 million saved. They estimate their savings will last 22 years in retirement. However, this may not be sufficient given increasing life expectancy.
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Not Sufficiently Diversifying Retirement Savings
Workers expect 45% of their retirement income to come from their 401(k), with Social Security contributing 18%. This heavy reliance on workplace plans could be risky if market conditions worsen or if individuals fail to diversify their retirement income sources.
Consider adding other assets to your retirement savings portfolio, such as individual retirement accounts, brokerage accounts, health savings accounts and real estate investments.
Skipping Expert Help
Just 27% feel confident making 401(k) investment decisions on their own, but confidence nearly doubles to 51% with professional advice. Yet many still rely on informal sources like family and friends, especially younger generations — 41% of Gen Z and 37% of millennials get financial advice from family and friends.
“No matter your age or income, it’s never too late to ask for help and take positive steps toward your retirement goals,” said Lee McAdoo, managing director at Schwab Retirement Plan Services. “Our findings underscore that professional advice can play a pivotal role in increasing confidence and improving outcomes.”
Letting Inflation Derail Your Strategy
Eleven percent of those surveyed reduced their 401(k) contributions due to inflation and market volatility. A better approach is to remain consistent with investments and maintain a diversified portfolio that can insulate you from market swings.
“If you’re thinking about making changes to your investments,” McAdoo said, “it’s important to think beyond the current environment and ensure that your investment strategy matches both your long-term objectives and your personal tolerance for risk.”
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This article originally appeared on GOBankingRates.com: Schwab: 4 Retirement Planning Mistakes Americans Are Making in 2025
