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Dave Ramsey and His Team Flag 6 Costly Retirement Mistakes After 55

These money mistakes may put your retirement at risk.

By Josh Koebert , Edited by Laura Hohenstein

Updated Nov. 10, 2026

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Dave Ramsey knows a thing or two about retirement planning. The financial guru has spent decades teaching people the basics of investing and money management. And he has some stern warnings for people over the age of 55 who are wholly unprepared for retirement.

Here are six financial mistakes Dave Ramsey and his team warn can tank your chances at a comfortable retirement after 55.

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Carrying consumer debt into retirement

It's no secret that Ramsey hates debt, especially for people who are older and getting closer to retirement. Debt is the killer that doesn't go away, and it needs to be addressed.

"You can't have a $750 F-150 payment," he said. "You can't have a student loan that's been around so long you think it's a pet."

Too many people are living beyond their means and crushing their ability to save and invest because they have monthly loan payments. Ramsey sees debt as a behavior problem. He has said personal finance is 80% behavior and only 20% head knowledge.

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Putting off your mortgage and neglecting retirement contributions

Since a mortgage tends to be the biggest piece of debt, having a payoff plan before you retire is one of the most important things you can do.

"If you do not have a paid-for house when you're through working, you're going to have a major problem," Ramsey warned. "It destabilizes your whole situation."

The reverse is also a trap. Skipping retirement contributions to throw everything at the mortgage leaves you with a paid-off house and nothing to live on.

"Retiring with zero money or close to zero money and a nice paid-for house is not a plan," Ramsey said.

Figure out a good budget and how much money you need to contribute to the minimum mortgage payments while growing your nest egg in your 401 (k) and IRA accounts.

Retiring at 62 is one of the biggest retirement mistakes

The average retirement age in America is 62, and Ramsey says that's too early for most people. It doesn't leave enough time to build up your tax-advantaged accounts.

"People underestimate how long they'll live and how much money they'll need," Ramsey told Kiplinger.com. "They retire broke or way too early. It's like jumping out of a plane without checking your parachute."

Retiring at 62 also locks in the lowest Social Security payout and costs you years of your highest compounding growth.

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Cashing out your 401(k) early costs more than most people expect

When you leave a job in your late 50s, an old 401(k) balance can look like a solution to a short-term problem. Ramsey Solutions says that's the worst move available to you.

"This is the worst thing you can do with your old 401(k)," Ramsey Solutions says. "If you withdraw the money from your 401(k) plan and take a direct cash distribution, you'll have to pay any state and federal income taxes you owe on every last penny. And if you're under 59 1/2 years old, you can go ahead and add another 10% early withdrawal penalty to your tab."

Resist the urge to cash out, and roll over that 401(k) into a separate IRA account. It's never worth it to cash out during your final earning years.

Relying on Social Security income only

Ramsey has never argued Social Security is worthless. His argument is that it was built as a supplement, and treating it as your whole plan is how people end up cash-poor at 70.

"Always think of this payout [Social Security] as icing on the cake, not the cake itself," Ramsey Solutions says.

The average monthly check runs about $2,086, and if that's your only income, you may have to downgrade your lifestyle or pick up part-time work to make it work. Ramsey's answer is to invest 15% of your gross income and let Social Security be the bonus.

Missing your Medicare enrollment window

Retiring before 65 means covering your own health insurance until Medicare kicks in. But the more expensive mistake is missing your enrollment window, because this one never stops charging you.

"Once you retire, you have eight months to enroll in Medicare without a penalty," Ramsey Solutions says. "If you sign up for Medicare while you're still working (which you have the option to do), Medicare will become either your primary or secondary insurance, depending on how big your employer is."

"Seriously, understanding and getting enrollment right is super important because if you get it wrong, you could end up paying penalties the rest of your life," Ramsey Solutions writes on its website. "Yeah, the stakes are that high!"

That isn't an exaggeration. The Part B late enrollment penalty adds 10% to your premium for every full 12-month period you could have signed up and didn't. Miss it by two years, and you're paying about $243.50 a month instead of the standard $202.90 in 2026, and that surcharge rises every time premiums do.

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Bottom line

Ramsey's warnings all point to the same financial mistakes people make in retirement planning: Decisions that seem manageable in your 50s can become expensive once your paycheck stops. Paying down debt, protecting retirement savings, and understanding when to claim benefits can help keep more of your income available when you need it most.

People in their 60s still have a significant opportunity to catch up on retirement, too. In 2026, workers ages 60 through 63 can contribute up to $11,250 in catch-up contributions to a 401(k), 403(b), or most governmental 457 plans, compared with $8,000 for workers 50 and older. That higher limit can give someone who is behind on retirement savings an additional opportunity to build their nest egg during their final working years.

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