Retirement Retirement Planning

Kevin O'Leary Says This 401(k) Habit Is Quietly Killing Your Retirement

And millions of American workers are guilty of it.

By Catherine Collins , Edited by Laura Hohenstein

Updated May 18, 2026

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Kevin O'Leary, the businessman and star of the show "Shark Tank," regularly appears on TV discussing personal finance, entrepreneurship, and the economy. In several interviews, he expressed concerns about the ways in which Americans use their 401(k)s.

O'Leary explains that he believes Americans are too passive when it comes to their 401(k) retirement plans. He's concerned that because so many workers set up their accounts and then forget about them, many people won't be able to retire on time. Here are some of his concerns.

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These habits negatively impact retirement planning

Kevin O'Leary consistently speaks about money behaviors such as overspending. He does not cite a lack of personal finance knowledge as the reason that people are unprepared for retirement. Rather, he says that overspending is the root cause, because the more people spend, the less they're able to contribute to their 401(k)s.

That, plus the habit of setting up a 401(k) and forgetting about it, are the primary reasons O'Leary says people do not have enough saved for retirement.

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O'Leary says that when people overspend using credit cards and have high-interest debt, it can make this problem worse. O'Leary frequently says that people do not focus enough on investing in their future. Rather, he says, people spend too much money going out to eat and neglect to budget accordingly.

O'Leary believes that the more people pay attention to tracking their spending and managing a household budget, the better they will be able to allocate more money to investing for their future. Today, credit card debt has surpassed $1.2 trillion in America, and many people say that life is unaffordable.

Assuming retirement will work itself out is also a problem

O'Leary also says people assume they will have enough in their 401(k)s at retirement without actually planning for it. Many believe that taking care of catch-up contributions later in life will prepare them for later years. However, O'Leary says it's important to develop discipline when it comes to retirement planning.

In previous generations, many workers could rely on pensions to fund their retirements. However, now, the responsibility for savings and investing for retirement is primarily the worker's responsibility. That's why assuming you're saving enough or planning to catch up later is not a good strategy, according to O'Leary.

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Believing a 401(k) is a complete retirement plan

O'Leary mentioned in interviews that 401(k)s are only one part of a retirement plan. Neither 401(k)s nor Social Security was meant to be the only stream of retirement income. In fact, unless the government passes new policies, Social Security can only pay out 77% of benefits starting in 2033.

In other words, O'Leary cautions workers that a 401(k) is not a complete retirement plan. It's important that workers take the time to understand fees, their investment mix, withdrawal strategies, and more, prior to retiring.

Not realizing how expensive health care costs will be in the future

O'Leary also cautions people that health care in retirement may be more expensive than they realize.

New data shows that those who are 65 can expect to spend over $170,000 on health care costs in retirement. This is one of the many reasons that O'Leary says people will likely need to save and invest more money than they realize in order to get the care they need in retirement.

O'Leary says what people need is simple: discipline

Today, many people are struggling with higher costs of living and high-interest debt. O'Leary is known for his tough love approach. For example, he says most people lack discipline and are too overconfident in their ability to retire.

Additionally, he says that people, especially young people, eat out too much and are wasteful with their money. The cure to all of that, he says, is to be much more disciplined about tracking expenses and spending.

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Direct advice like O'Leary's is helpful for many

Not everyone likes O'Leary's advice, but others appreciate his direct approach. Right now, many people are feeling the stress of rising costs, and O'Leary provides a practical approach to preparing for life's big milestones like retirement.

He also recommends that people have an emergency fund, live on a budget, and pay down high-interest debt as quickly as possible.

Bottom line

Ultimately, if Americans want to save and invest enough to have a stress-free retirement one day, following O'Leary's advice can help.

His main message is to encourage people to pay more attention to their finances, become more aware of their 401(k) fees and balances, and not leave their retirement years up to chance. That can be achieved through discipline, something O'Leary wholeheartedly supports.

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