What’s Your #1 Retirement Mistake?
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By Ryan Thacker, Co-Founder, B.O.S.S. Retirement Solutions
Quick Summary
$750,000. $1 million. $2 million. Most people spend their entire working lives chasing a savings number, convinced that once they hit it, they've earned the right to retire. But the number alone doesn't determine whether your retirement succeeds or fails. What determines it is what you do with that money: how you generate income from it, how much of it goes to taxes, when you claim Social Security, how you plan for healthcare, and how you protect it from a market downturn at exactly the wrong time. In this post, we break down the five things that matter far more than the size of your nest egg, and how the right plan can make $500,000 work like $1 million, or $750,000 work like $1.5 million.
If you're within 5–10 years of retirement and want to see what your specific plan could look like, our team at B.O.S.S. offers a free, personalized B.O.S.S. Retirement Blueprint, a one-page customized financial game plan that covers income, taxes, Social Security, healthcare, and more.
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The Magic Number Is a Myth
Here's something we've seen play out across thousands of client conversations over the years: the people who feel most anxious about retirement are often the ones who've been fixated on a number.
They decided somewhere along the way that $750,000, or $1 million, or whatever figure felt right, was the finish line. And they've been running toward it ever since, without a plan for what happens when they cross it.
The uncomfortable truth is that the number you've saved is only one variable in a very long equation. There are people with far more than $750,000 who run out of money in retirement. And there are people with considerably less who are comfortable and financially secure for the rest of their lives. The difference isn't the number. It's the plan behind it.
As we often say: it's not what you save. It's what you do with what you save.
1. The Ticking Tax Bomb
The first thing most retirees don't see coming is taxes, not as a line item, but as a compounding, multi-decade expense that quietly erodes their savings from multiple directions at once.
When you retire, your income sources don't exist in isolation. Your IRA and 401(k) withdrawals, your Social Security benefits, and your investment income all get combined into a single tax calculation. And before you realize it, your taxable income may be significantly higher than you ever expected, high enough to push you into a bracket you thought you'd left behind when your paycheck stopped.
Here's the deeper problem: most people go to a CPA to get their taxes filed. Their CPA is doing exactly what they're supposed to do, ensuring compliance with last year's return. But compliance and strategy are two completely different disciplines. What most retirees actually need isn't someone to report what happened. They need someone to help them shape what's going to happen, across the next 10, 20, or 30 years.
A survey we've seen cited frequently in our industry found that less than 60% of pre-retirees feel they understand how to save money on taxes, and 85% say that helping them reduce taxes is something they expect from a financial advisor. Yet for most people, that conversation never happens in any meaningful depth.
This is why we call it the ticking tax bomb of retirement. It's a problem that builds slowly and quietly, and by the time most people notice it, a significant portion of their savings has already been handed over to the IRS unnecessarily.
Compound Tax Savings, The Flip Side of the Problem
If the tax bomb is the threat,compound tax savings is the opportunity. Warren Buffett called compound interest the eighth wonder of the world. But most people have never heard of compound tax savings, and it may be even more powerful.
Here's how it works: if you save $10,000 in taxes in the first year of retirement through smart, coordinated planning, that's not a one-time win. In many cases, those same strategies can generate similar savings year after year. Over 25 years, that's $250,000 in cumulative tax savings.
But here's where it gets genuinely exciting: when those savings stay invested instead of going to the IRS, they compound. $250,000 in tax savings, invested and growing over a 25-year retirement, could quietly become $500,000 or more. For many families, that kind of outcome is a complete game changer, and it doesn't require saving another dime. It requires planning.
The window to take advantage of this is not unlimited. The best opportunities typically exist in the years immediately before retirement and in those first few years after, before RMDs begin, before Social Security triggers higher taxation, before the dominoes start falling. Acting early is the difference between capturing the opportunity and watching it close.
2. The Income Replacement Problem
When your last paycheck arrives, something happens that most people aren't emotionally or financially prepared for: the income stops.
A recent study by LIMRA found that less than 20% of people, including people who work with financial advisors, have an actual income replacement plan in place when they retire. One in five. The other four are, as we often say, flying blind.
In your parents' or grandparents' generation, this wasn't as difficult to solve. You worked 30 years for the same company, retired with a pension, a guaranteed paycheck for life, added Social Security on top, and you were fine. That world is largely gone. Less than 20%of Americans today have a pension. If you don't work for a government entity, a police department, or a fire department, there's a strong chance you're in the 80% without one.
What that means is that you have to build your own income streams, multiple ones, from multiple sources, that will last as long as you do. Social Security can be one. But as we'll cover in a moment, it has limits and risks of its own. Investment portfolios can generate income, but they're subject to market risk at exactly the moment you can least afford it. And relying on a single source, especially the stock market, is a fragile strategy for something as non-negotiable as monthly income.
Building a Private Pension
One of the most underutilized tools for solving the income replacement problem is the annuity, specifically, using it to create what we call a private pension.
We recently sat down with a family who had no pension, was roughly 10 years from retirement, and was fully invested in a market that had been performing extremely well. They were comfortable, but they had no guaranteed income floor outside of Social Security. After looking at their full picture, we were able to structure a private pension for them that would generate $120,000 per year in guaranteed income, like clockwork, beginning at retirement. Add their projected Social Security of approximately $60,000 per year, and that family is looking at $180,000 a year, or $15,000 a month, in income they can count on regardless of what the market does.
That changes everything about how you approach the rest of your retirement. When your basic income is secured and predictable, the portion of your portfolio that stays in the market isn't your lifeline, it's your growth engine. The anxiety that comes from watching market swings diminishes significantly when your monthly income doesn't depend on them.
With interest rates having been higher in recent years, the math on these structures has also improved considerably, making this a particularly relevant conversation for families who are 5–15 years from retirement right now.
3. Social Security: The Decision That Compounds for Life
Social Security isn't just a benefit. It's one of the largest financial decisions most Americans will ever make, and the difference between getting it right and getting it wrong can be hundreds of thousands of dollars over a lifetime.
We've helped more than 55,000 families make informed Social Security decisions. And the single most consistent mistake we see is people making this choice in isolation, based on what a sibling did, what a coworker suggested, or what a general rule of thumb recommends, without factoring in their own taxes, their spouse's benefit options, their Medicare exposure, or their IRA and 401(k) withdrawal strategy.
Social Security doesn't exist in a vacuum. When you file, you potentially trigger taxes on up to 85% of your benefits. Your filing decision affects your Medicare premiums. It shapes your spouse's lifetime income. And getting it wrong isn't something you can easily fix, there are limited do-overs once the decision is made.
The Social Security Trust Fund is also worth paying attention to. As of recent projections, the fund is on a trajectory toward insolvency that could result in benefit cuts of approximately 25% if Congress doesn't act. We're not predicting that outcome, Congress has stepped in before and likely will again. But the uncertainty itself is a reason to build your retirement plan with income diversification in mind, rather than treating Social Security as a guaranteed, permanent foundation that requires no strategic thought.
The right approach is to look at Social Security as one piece of a coordinated income picture, considered alongside your taxes, your other income sources, and your spouse's situation. When done right, the strategy around when and how you claim can add significantly to your lifetime income without requiring you to save another dollar.
4. Healthcare: The Cost Most Plans Don't Account For
Medicare is not free retirement healthcare. This is a misconception that catches a surprising number of well-prepared retirees off guard.
Medicare covers a meaningful portion of your medical expenses, roughly 80% of covered services, but it leaves significant gaps: dental care, vision, hearing, and most critically, long-term care. And the costs in the long-term care space have grown substantially.
According to the 2024 Genworth Cost of Care Survey:
● Assisted living communities now cost a national median of $70,800 per year, up 10% year over year
● Home health aide services run approximately $77,792 annually, actually more expensive than assisted living in many cases
● Skilled nursing facility care costs $111,325 per year on average, rising to $127,750 for a private room
A Fidelity Investments study estimates that a 65-year-old couple retiring today could spend $345,000 on healthcare costs before the end of their lives. That is not a catastrophic scenario. That is the median expectation.
If your retirement plan doesn't account for healthcare costs in a meaningful way, not just Medicare premiums, but the full spectrum of possible care costs, it has a significant gap. This is especially true for anyone who retires before age 65, since Medicare eligibility doesn't begin until 65 and the gap years of coverage need to be planned for separately.
We also frequently work with what we call the sandwich generation: people in their late 50s and 60s who are simultaneously navigating their own retirement planning while supporting aging parents. The financial, physical, and emotional demands of that position are real and often underestimated. Having a plan that accounts for potential care giving costs, and the income flexibility to handle unexpected demands, is something we address directly in the B.O.S.S. Retirement Blueprint.
5. Sequence of Returns Risk: Why Timing Is Everything
If you've been in the market for the past 14 years, you've experienced one of the longest bull market runs in American history. Portfolios have grown. Withdrawals have been easy. It can start to feel like markets only go in one direction.
They don't.
Sequence of returns risk is the danger of experiencing a significant market downturn in the early years of retirement, right when you've stopped contributing and started withdrawing. The math here is unforgiving. If you retire with $1 million and the market drops 50%, you now have $500,000. If you're drawing income from that portfolio to live on, your withdrawals are eating into a principal that no longer has time to fully recover. The sequence in which returns occur, not just the average return over time, determines whether your money lasts.
The decade from 2000 to 2010 is the example we return to often: the dot-com crash, a partial recovery, and then the 2008 financial crisis. Someone who retired at the start of that decade and was relying on portfolio growth to fund their retirement faced an extremely difficult situation. A 10-year period of essentially flat market returns, combined with ongoing withdrawals, can permanently impair a retirement plan that looked perfectly reasonable on paper the day it started.
The solution isn't to abandon growth assets, it's to ensure that your retirement income doesn't depend entirely on them. When you have guaranteed income floors (Social Security, a private pension, or structured annuity income) covering your essential expenses, a market downturn becomes uncomfortable but manageable rather than catastrophic.
The Plan That Connects All of It
The five things we've covered here, taxes, income replacement, Social Security, healthcare, and sequence of returns risk, are not independent problems. They interact. A Social Security decision affects your taxes. Your tax strategy affects your Medicare premiums. Your healthcare costs affect how long your income needs to last. Your withdrawal order affects everything downstream.
Most retirement advice treats each of these as separate conversations. We believe they need to be addressed together, in a single coordinated plan that looks at your complete picture, not just your portfolio balance.
That's what the B.O.S.S. Retirement Blueprint is designed to do. It's a personalized, one-page retirement plan that covers the five critical areas: cash, income, growth, taxes, and legacy. It shows you how to make your savings work harder, reduce your tax burden, and build income streams that last as long as you do.
Most firms charge thousands of dollars for a plan like this. Ours is free, even if you're not a client.
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About the Author
Ryan Thacker is the Co-Founder of B.O.S.S. Retirement Solutions and B.O.S.S. Retirement Advisors, a fiduciary RIA based in Lehi, Utah. Alongside his brother Tyson, Ryan has helped more than 55,000 families across Utah, Idaho, Washington, and Arizona build retirement plans that go beyond savings targets to address income, taxes, Social Security, and long-term financial security. B.O.S.S. currently manages more than $1 billion in retirement assets across 11 office locations.
This article is for educational purposes only and does not constitute personalized financial, tax, or legal advice. Consult a qualified financial professional before making any financial decisions. Advisory services offered through B.O.S.S. Retirement Advisors, LLC, an SEC-Registered Investment Advisor. Insurance products and services offered through B.O.S.S. Retirement Solutions.
Related Resources from B.O.S.S. Retirement Solutions:
● The B.O.S.S. Retirement Blueprint
● Social Security Maximization
