Retirement is often imagined as a period of comfort and security — a time to travel, spend more time with family, and enjoy the fruits of decades of work. Yet, the reality for many retirees is more complicated.

Small misunderstandings and common assumptions, if left unchecked, can lead to major financial shortfalls. Some people underestimate how much they’ll spend, others put too much faith in Social Security, and many are caught off guard by healthcare bills or the impact of inflation.

The good news is that each of these traps can be avoided with some clear-eyed planning.

One of the most persistent misconceptions is that expenses will naturally shrink once you stop working. While certain costs do disappear — such as commuting or business attire — many retirees find their spending stays the same or even rises.

Travel, home upgrades, hobbies, and supporting adult children or grandchildren can add up quickly. Healthcare, in particular, often becomes a much larger part of the budget. Instead of assuming your costs will drop, build a realistic retirement budget based on the lifestyle you want, and give yourself room for surprises.

Another major misstep is leaning too heavily on Social Security as the primary source of income. For most people, those monthly checks cover only a fraction of what’s needed to live comfortably.

Today, the average monthly benefit is under $2,000 — hardly enough to sustain the standard of living many people expect. Social Security works best as one piece of a larger puzzle, supplemented by retirement savings, investments, or part-time income.

Deciding when to claim also matters: waiting until age 70 can significantly boost the amount you receive each month, which can make a big difference over a long retirement.

Healthcare costs are another area where reality often clashes with expectations. Medicare is a valuable program, but it doesn’t pay for everything. Premiums, deductibles, co-pays, prescription drug costs, and services like dental or vision care still come out of pocket. And long-term care — whether at home or in a facility — is largely uncovered and can be one of the most significant expenses you face. Preparing means understanding what Medicare covers, exploring supplemental insurance, and thinking ahead about long-term care plans before costs rise sharply with age.

Some people forget about the quiet but powerful force of inflation. Even at a modest annual rate, inflation erodes purchasing power over the decades. What costs $50,000 a year to maintain your lifestyle at the start of retirement might require $80,000 or more later on. If your investments are too conservative, you risk your income not keeping pace with rising prices.

Balancing safe assets with growth-oriented investments — and revisiting that balance as you age — can help ensure your money maintains its value.

When it comes to Social Security, impatience can be costly. Many people claim benefits as soon as they’re eligible at 62, thinking it’s better to start “getting something back” from the system. But this choice locks in a reduced payment for life — often by as much as 30% compared to waiting until full retirement age or later.

For people who live into their 80s or 90s, delaying benefits can result in significantly more income over the years, and can also provide higher survivor benefits for a spouse.

Taxes are another surprise for many retirees. While your paycheck stops, taxes don’t necessarily go away. Withdrawals from traditional IRAs and 401(k)s are taxed as ordinary income, and Social Security benefits can be taxable depending on your total income. Without a strategy, you might end up paying more than necessary.

A mix of taxable, tax-deferred, and tax-free accounts can give you flexibility, allowing you to withdraw from different sources in a way that minimizes your tax burden over time.

Investment allocation is another area where extremes can hurt. Some retirees shift almost entirely into “safe” investments like certificates of deposit or government bonds, only to see their purchasing power decline as inflation outpaces their returns. Others stay too aggressive, leaving themselves vulnerable to market swings just when they need steady income. The best approach is often a middle ground — keeping a portion in stable, short-term holdings to cover near-term expenses while allowing the rest to grow over time.

Estate planning is frequently overlooked, especially by those who believe it’s only for the wealthy. But without a will, healthcare directive, and up-to-date beneficiary designations, your wishes may not be carried out, and your family could face unnecessary complications and expenses. Having these documents in place provides clarity and protection for you and your loved ones.

One of the biggest risks of all is outliving your savings. Retiring at 65 could mean needing to fund three decades of expenses. Unexpected costs, low investment returns, or high healthcare bills can accelerate the drawdown of your nest egg. This is why it’s important to use conservative estimates in your planning, consider reliable income sources like annuities or delayed Social Security, and adjust your spending if necessary.

Finally, there’s the belief that retirement planning is something you do once and then forget about. Life changes — sometimes dramatically — and so do markets, tax laws, and personal priorities. A plan that made sense at 55 might not be right at 70. Reviewing your plan regularly allows you to make course corrections, whether that means adjusting investments, changing withdrawal rates, or rethinking your goals.

In the end, a successful retirement plan isn’t about hitting one magic savings number. It’s about creating a flexible, realistic, and tax-efficient strategy that can adapt to whatever comes your way. That means recognizing the realities behind common myths, making informed choices about income and expenses, and revisiting your plan as life unfolds.

If you start early, diversify your income sources, and stay proactive, you can avoid these costly mistakes and enjoy the retirement you’ve worked so hard to achieve. The key is to treat your retirement plan as a living document — something that grows and changes with you — rather than a static goal to check off a list.