Retirement Retirement Planning

Kevin O'Leary's Blunt Warning About 401(k)s No One Wants to Hear

Are you making these retirement account mistakes?

By Catherine Collins , Edited by Laura Hohenstein

Updated Oct. 5, 2026

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Kevin O'Leary, the well-known entrepreneur and star of the hit TV show Shark Tank, often shares concerns about Americans' personal finances. He frequently discusses how the average American lacks adequate savings in their 401(k) retirement plans.

He is especially concerned about workers' lack of discipline when it comes to spending and often recommends steps people can take to build better financial habits. Here are some of his blunt warnings about 401(k)s and retirement that many workers probably don't want to hear.

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People are too passive and overconfident about retirement

One of the biggest issues when it comes to retirement savings, O'Leary says, is that too many people assume they will eventually have enough money for it. This overconfidence leads them to invest money on autopilot, without making a plan or increasing contributions over time.

O'Leary cautions against setting up a retirement account and forgetting about it. Rather, he encourages people to make a plan for their retirement by taking an active role in contributing to their account, monitoring their holdings, and reviewing their contributions and fees annually.

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Many workers underestimate how expensive retirement will be

Another mistake people make, according to O'Leary, is underestimating how expensive retirement will be.

Even if they make a plan to pay for their basic living expenses, many retirees are surprised by just how expensive it is to pay for health care in retirement. The most recent Fidelity data found that people aged 65 can expect to spend $185,500 on health care costs in retirement. That's because Medicare doesn't pay for everything, including long-term care, some prescriptions, and co-pays.

Retirees may have other expenses they aren't prepared for too, like increases in home insurance costs and pricey home repairs.

Carrying debt into retirement can make your golden years more stressful

O'Leary is also adamantly against high-interest debt. He says debt like this, such as credit card debt, can trap people in retirement. Debt creates monthly payments that can make it hard for retirees to increase cash flow and plan for expenses.

Ideally, O'Leary recommends that people develop discipline with their spending in order to pay down debt, save for emergencies, and have enough to afford living expenses and health care costs as they age. People can practice living on a budget long before retirement, so that the transition to living on a fixed income is easier.

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Believing Social Security will be enough can make you short on retirement goals

Another mistake people make, according to O'Leary, is that they believe that Social Security income will be enough to support them in retirement. This leads people to undersave when it comes to their 401(k)s.

However, neither Social Security nor retirement plans were meant to fund 100% of retirement. Each plays an important role and creates more than one income stream for retirement.

Not having emergency savings can hurt your cash flow in retirement

O'Leary also recommends that people have at least three months of expenses set aside in an emergency fund. This is especially important for retirees who may underestimate how much it will cost to go to the emergency room or fix a flooded basement.

Having an emergency fund allows retirees to have cash on hand for unexpected expenses rather than withdrawing from a 401(k). This is helpful, as withdrawing money from a 401(k) during a down market can negatively impact retirement savings long term.

Habits and discipline are the key to successful retirement savings

Ultimately, O'Leary is a huge proponent of having discipline. He explains that discipline is necessary to create wealth and develop habits that can help you during your golden years.

Many people think that they'll catch up on retirement savings at a later date, but O'Leary says investing consistently over time is what yields results. Being able to retire isn't the result of lucky breaks or windfalls. It typically comes from working, investing over time, taking advantage of employer matches, avoiding high-interest debt, and being a disciplined spender.

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O'Leary wants Americans to invest more and spend wisely

Ultimately, O'Leary's main message to Americans is to be aware of your spending patterns and take an active role in your 401(k). He doesn't want workers to set up their accounts and forget about them. Rather, he encourages people to increase contributions, pay down debt to free up more money to invest, and stay disciplined.

Of course, if you have questions or if you're unsure whether or not you're on track for retirement, you can always make an appointment with a financial advisor to find out.

Bottom line

If you want to free up your retirement budget, O'Leary has several pieces of advice for you. He encourages people to invest in their retirement accounts and avoid overspending.

While some feel that his advice is harsh, others appreciate his direct approach and willingness to help people understand the steps they need to take to have a secure retirement future one day.

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