Retirement Retirement Planning

Kevin O’Leary Sounds the Alarm on 401(k)s (And He Doesn’t Hold Back)

Mr. Wonderful wants you to pay more attention to your money.

By Catherine Collins

Edited by Andrea Basse

Updated Jan. 14, 2026

Kevin O'Leary, better known as Mr. Wonderful, is a well-known investor, entrepreneur, and TV personality on Shark Tank. He frequently appears in the news and in media interviews discussing the economy, 401(k) retirement plans, and his concerns about how Americans handle their personal finances.

O'Leary regularly discusses how American workers are not investing enough in their 401(k)s. He also feels that many people are not taking retirement planning seriously enough and are instead mindlessly spending when they should be investing. Additionally, he points out that many people are overconfident about retirement and don't have a firm grasp on what it's like to be retired and how much it will cost to live.

Here are several of his concerns regarding 401(k)s and how American workers use them.

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Most workers are not saving enough

O'Leary regularly speaks about how people are not saving enough for their retirement plans and spending too much on unnecessary purchases, like going out to eat lunch. He says that too many people don't save enough and don't increase their retirement contributions each year. He has repeatedly advised workers to save and contribute more to their retirement accounts if they want to have a chance of having enough money in retirement.

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Lack of discipline impacts 401(k) returns

Unfortunately, O'Leary says that many people lack the discipline to control their spending. This extends to buying things they don't need and not consistently contributing to a 401(k) plan. This is dangerous because he says Social Security is not enough to sustain people in retirement and was never meant to. People will need additional streams of income in retirement, such as 401(k) plans and IRAs. He says many retirees should also consider working part-time for the mental and financial benefits.

Personal debt kills retirement savings

O'Leary frequently talks about the dangers of high-interest consumer debt and recommends paying it off as soon as possible. He says that when people have high-interest debt, it's difficult for them to fund retirement accounts. To put it another way, making debt payments can erase future investment gains because money that people put towards minimum payments and interest is money that they're not able to put towards retirement investing.

According to the Federal Reserve, U.S. credit card balances are currently $1.23 trillion. When people carry high-interest balances like this, it makes it hard to have extra money to contribute to retirement. It also means your money is compounding in the wrong direction.

Retirement can be expensive

O'Leary says that another mistake people make is believing that retirement will be more affordable than it actually is. Many people think about their retirement in terms of the years they will have to relax and pursue hobbies, but the truth is that many people struggle and are bored when they retire.

However, Fidelity Investments' 2025 Retiree Health Care Cost Estimate shows that a 65-year-old who retires today could spend as much as $172,500 on health care alone in retirement. For that reason, O'Leary says it's very important to accurately estimate how much retirement will actually cost, including the general cost of living and healthcare costs.

Overconfidence doesn't grow returns

O'Leary says that sometimes people are overly confident about what their investment returns will provide for their 401(k) balances. He says that overconfidence can damage people's 401(k) balances because they overestimate how much they'll have in retirement.

Instead, he encourages people to use their last few working years developing the discipline to live on less, save, and lower expectations. That way, they'll be used to living on less when they retire.

Misconceptions and retirement myths

O'Leary is critical of common retirement advice, and he encourages people to be realistic when preparing for retirement. He says that, in reality, people's ability to retire is a direct result of their discipline over several decades. People should not rely on employer matches, lucky breaks, or any other windfall to fund their retirements. Rather, they should rely on their own consistent investing over time, and anything else is a bonus.

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Why O'Leary's words resonate

There is currently significant economic uncertainty in 2026. Many people are dealing with rising costs, the impact of tariffs, and other widespread financial issues. Many people have household debt and are not saving enough.

O'Leary does not sugarcoat his advice, but it resonates with people because many actually just want to know the steps to take to retire confidently. What O'Leary offers is advice he believes is in people's best interests so they can save enough for their later years.

Bottom line

Ultimately, Kevin O'Leary's advice is never going to feel like a warm hug, and it's not supposed to. But that doesn't mean it's not helpful to people. O'Leary frequently warns people to pay more attention to their spending, repaying their debt, and investing in their retirement plans. He argues that under-saving and carrying debt well into middle age won't help people retire comfortably. In fact, only saving and investing consistently over time can help you get there.

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