Ready For Retirement – Episode Summary

Podcast: Ready For Retirement
Host: James Conole, CFP®
Episode: The 3 Worst Retirement Mistakes I See All the Time
Date: October 7, 2025

Main Theme & Purpose

In this episode, James Conole, CFP®, reveals the three most common and damaging mistakes he observes retirees making. Drawing from extensive experience with hundreds of clients, James quantifies the potential costs of these missteps and provides actionable strategies. His goal is to help listeners avoid regret and achieve a more fulfilling, financially secure retirement.

Key Discussion Points & Insights

1. Ignoring the Impact of Taxes in Retirement

[00:37 - 11:54]

• Misconception about Taxes:
  Many retirees believe that their tax bill will automatically decrease after leaving the workforce due to lower income. “For the first few years of retirement, this belief is confirmed. They do drop into a lower tax bracket. But… you might be neglecting a potential tax bomb that’s waiting for you if you don’t take the correct steps today.” (James, 01:17)
• Case Study – Lori:
  Lori, a sample client aged 61 with a $1M portfolio, experiences low taxes initially upon retirement due to reduced taxable income. However, taxes jump back up later due to Required Minimum Distributions (RMDs) from tax-deferred accounts.
• The Trap:
  Retirees often overlook how Social Security taxes, IRMAA surcharges (Medicare premiums based on income), and RMDs can drastically raise future tax bills.
• Solution – Roth Conversions:
  Proactively converting funds from IRA to Roth accounts during low-income years can significantly reduce lifetime taxes.
  • Example: If Lori converts just enough each year to remain in the 12% tax bracket, “that’s going to result in over $145,000 fewer dollars being paid in federal income taxes.” (James, 07:32)
• Key Quote:

  “Your tax bill in retirement is not guaranteed to be lower than your tax bill in your working years.” (James, 06:12)

• Actionable Steps:
  • Focus on long-term tax planning, not just the first few years of retirement.
  • Consider Roth conversions and other strategies during low-tax years.
  • Don’t wait until RMD age (73+); plan ahead or risk being “stuck with a much higher tax bill. And at that point, it might be too late.” (James, 09:18)

2. Spending Too Little in Retirement

[11:55 - 17:14]

• The Irony of Scarcity:
  Most retirees fear outliving their assets, but the far more common error is underspending. James notes, “People’s greatest fear is spending too much and running out of money. … But the greatest and most common thing we actually see is people who have more money than they’ve ever had at any point in their lives still living as if they’re going to run out.” (James, 12:11)
• Negative Effects:
  • Results in denying yourself meaningful experiences (travel, lifestyle enhancements).
  • Creates “a less than ideal retirement” focused on fear rather than enjoyment.
  • Leads to the paradox: “Maybe you don’t run out of money, but you never really live.” (James, 13:16)
• Planning is the Remedy:
  • A financial plan and projection models help clarify realistic spending thresholds.
  • “This is why you put a financial plan in place… because we don’t know [the future]. But if all we’re doing is going into retirement with a scarcity-based mindset, it’s going to lead us to naturally just spending less than we otherwise should have.” (James, 14:16)
• Pro Tip:
  Use projection tools (e.g., Retirement Planning Academy software) to confidently map out spending.

3. Pursuing the Wrong Investment Strategy

[17:15 - 26:23]

• The “What Got You Here Won’t Get You There” Problem:
  Many retirees stick with the investment approach that built their nest egg, not grasping that retirement requires a new strategy.
  “The things that got you here are not the things that are going to get you there. The approach in retirement needs to shift.” (James, 18:33)
• Three Pillars of Retirement Investing:
  1. Growth Engine
     • Maintains purchasing power amidst inflation.
     • Example: With just 3% inflation, expenses can rise 150% over 30 years.
     • Key Quote: “If it costs you $100,000 today to live, that same exact lifestyle will cost closer to $250,000 by the end of your retirement.” (James, 19:36)
  2. Stable Reserves
     • Acts as the “emergency fund for your portfolio.”
     • Provides liquidity during market downturns, avoiding the need to sell growth assets at a loss.
     • Important because market returns are “sporadic”—not steady year to year.
  3. Ballast/Buffer Assets
     • Investments that are neither growth-focused nor purely liquid, but help manage risk and smooth out volatility.
     • Customizable based on personal risk tolerance.
     • Quotes: “Know thyself. How do you do when markets are volatile?” (James, 24:41)
• Common Mistake:
  Assuming the past 5–10 years’ performance will continue unchanged.

  “That is a surefire way to put your retirement at unnecessary risk, to subject yourself to the risk of having to go back to work or having to depend upon someone else.” (James, 25:53)

• Takeaway:
  Balance is key—combine growth, cash, and ballast in proportions suited to your needs.

Notable Quotes & Memorable Moments

• “If you address these three things, if you create a plan for these three things, your odds are you’re going to have a much more successful retirement outcome than you would if you didn’t do any of these.” (James, 26:46)
• “Maybe you don’t run out of money, but you never really live.” (James, 13:16)

Important Timestamps

• 00:37 – Start of discussion on the first retirement mistake: ignoring taxes
• 07:32 – How Roth conversions can save six figures in taxes
• 11:55 – Beginning of discussion on spending too little in retirement
• 13:16 – The danger of never really living in retirement
• 17:15 – Introduction to changing investment strategy for retirement
• 19:36 – Impact of inflation on retirement lifestyle
• 24:41 – Adjusting portfolio risk to your personal comfort
• 26:46 – Summary and call to action

Recap: The 3 Biggest Retirement Mistakes

1. Ignoring taxes and poor tax planning:
   Leads to higher lifetime tax bills and potential “tax bombs.”
2. Spending too little due to fear:
   Results in missed opportunities for fulfillment and enjoyment.
3. Maintaining a pre-retirement investment strategy:
   Fails to adjust for new risks and needs in retirement, exposing you to unnecessary financial shocks.

Final Advice

• Start planning early to avoid these mistakes.
• Leverage tools and work with advisors knowledgeable in retirement-specific strategies.
• Ensure your plan fits your desired lifestyle—not just your fears.

“Make sure that you have a plan in place to avoid these mistakes so that you can live the best possible retirement.” (James, 28:08)