7 Moves That Will Destroy Your Retirement Account

There’s a good chance your retirement strategy is quietly sabotaging your future. It’s not about making one catastrophic mistake; it’s about the small, common missteps that compound over time, draining your nest egg without you even noticing. 

For many, by the time the damage becomes clear, it’s already too late.

Here are seven of the most destructive moves that can derail your retirement goals.

1. Thinking Your 401(k) Is a Retirement Plan

Most people with a 401(k) think they’re covered. They’re not. A 401(k) is a tool, not a plan. It might offer a match, but it also locks up your money until you're over 60, comes with limited investment choices, and often hides high fees behind default options.

Even more concerning, average 401(k) balances for people in their 60s sit under $130,000. That's nowhere near enough to fund two or three decades of life after work. And by the time most people realize it, they're already on the way out of the workforce.

2. Letting Fear or Headlines Dictate Your Moves

Markets go through chaos. Elections bring uncertainty. The news cycle is always looking for the next crisis.

Letting fear decide when to invest, or when to pull out, is not a strategy. It's just reacting. And the people who do that consistently are the ones who miss the strongest rebounds.

They sell low, buy back in late and repeat the cycle. Then they wonder why their portfolio never seems to grow the way it should.

Check out: A new investment strategy gaining popularity among institutional investors can provide positive returns even in a down market. Individuals are now using this same strategy to protect their retirement portfolios and grow their wealth. 

3. Underestimating How Much You’ll Actually Need

There's a dangerous assumption that retirement comes with lower expenses. Sometimes it does. But not always.

Medical costs tend to increase, travel becomes more frequent, adult kids might still need help and homes still need work. Roofs leak, appliances break, and nothing gets cheaper over time.

If you're only planning to replace your current paycheck, you’re likely underestimating the true cost of retirement. Add in inflation, and what feels like a solid nest egg today might fall short far sooner than expected.

4. Ignoring the Silent Killer: Fees

Fees don't feel urgent, but they're relentless. A seemingly small 1.5% annual fee can take a huge bite out of your retirement savings over time, often hundreds of thousands of dollars lost to advisors or fund managers who may not even outperform the market.

Consider this: A 1.5% annual fee on a $250,000 portfolio costs you $3,750 this year. Over 20 years, with compounding, that ‘small’ fee could erase over $150,000 from your final nest egg.

Many people have no idea what they're actually paying. Default mutual funds in 401(k)s often come with management layers, administrative charges, and hidden fund-level fees. It adds up, year after year.

5. Relying Too Heavily on Wall Street and Ignoring What the Wealthy Are Actually Doing

Most portfolios are built entirely on public stocks and bonds. And most of them look pretty much the same. That simplicity can be comforting, but it also leaves you exposed.

The wealthiest investors don't leave everything in the hands of Wall Street. They put capital into assets that don't move with the market: private real estate, private credit, farmland, venture capital and other assets that don't follow the same market cycles as stocks and bonds.

These aren't just vanity investments. They offer cash flow, long-term appreciation, and insulation from the emotional swings of public markets. If your entire portfolio is tied to the same indexes and headlines, you’re missing a layer of protection and opportunity that more sophisticated investors rely on.

Don't miss: One of the fastest-growing private real estate strategies isn't buying or renting homes,  it's investing in home equity. See how the wealthiest investors are tapping into this market.

6. Treating Your Retirement Account Like a Backup Plan Instead of a Priority

Too many people only contribute to retirement when they "have extra." Which usually means they don't contribute much at all.

The problem is that the longer you wait, the more expensive retirement becomes. Skip the early years and you don't just miss out on what you could've saved, you lose the decades of growth those early contributions would have generated.

The people who retire with confidence aren't usually the ones who made big bets or had perfect timing. They're the ones who treated retirement like a bill that had to be paid every month, no matter what.

7. Ignoring the $34 Trillion Opportunity Under Your Feet

For millions of Americans, their single largest asset is their home, containing trillions of dollars in collective equity. Yet, for most, this wealth is completely illiquid and not part of their investment strategy.

While the ultra-wealthy have long used real estate as a core holding, there's a new trend of Wall Street: finding ways to invest in the appreciation of residential real estate without the burden of being a landlord. 

This asset class, which doesn’t move with the stock market, is increasingly being used by institutional investors to diversify and add a layer of protection against market volatility.

From real estate investment trusts (REITs) focused on single-family homes to newer investment vehicles that buy into home equity agreements, investors are finding ways to unlock the largest source of wealth for Americans. Exploring how to add real estate exposure beyond your primary residence can be a powerful engine for a more resilient retirement portfolio.

Read next: Wall Street has been quietly buying up equity in owner-occupied homes, and the strategy is kind of genius. Here’s how one company is using it to produce 15%+ annual returns for its investors.

Image: Shutterstock