Navigating the road to retirement can be an enjoyable journey, full of anticipation and excitement as the destination draws near.

It can also be filled with pitfalls and potholes for those travelling without a map.

Not having a financial plan or goal is one of the most common mistakes people make as they approach retirement, but there are a few more to keep an eye out for along the way.

Mistake 1: When the gap becomes a trap

Do you know what your retirement gap is? That’s the difference between the amount you have saved for your retirement and how much money you need to fund it.

The earlier you take steps to understand your gap and how to bridge it, the better, but it’s never too late to start.

The first step here is to set clear expectations for what you want retirement to look like, when you want to retire and how much your lifestyle will cost, then work backwards from that to determine the gap between expectation and reality.

Mistake 2: Blowing out the budget

It’s important to have a realistic idea of how much money you need to live off when you retire and one of the best ways to do that is to look at what you’re already spending.

I find that when people try to set a budget for the future, they tend to vastly underestimate their living expenses – including their discretionary spending – which can undercook the numbers.

Retirement is a time to enjoy your lifestyle, not downgrade it, so be honest about how much you spend and reverse engineer a savings and investment plan so you’re not caught short.

A registered Financial Adviser can help you budget and there are also some great online calculators and tools to get you started.

Mistake 3: Working harder, not smarter

People approaching retirement often have a goal age in mind, rather than a goal amount.

While it’s great to have something to work towards, becoming fixated on retiring at a certain age – instead of when your savings hit a certain point – may see you miss out on opportunities.

With a clear plan, honest budget and solid understanding of your retirement gap, you might find that you’re on track to enjoy retirement sooner than you thought.

For instance, if the opportunity arises to take a redundancy or reduce your hours, you may be able to comfortably transition to retirement before you reach your goal age.

Mistake 4: Ignoring the impact of debt

I’ve had people come to me and say they’d like to retire in five years but also want to buy an investment property, fully funded with debt.

When you’re working and you have money coming in, you can pay down debt. When you’re retired, having a debt and no income doesn’t make sense.

Most people are unlikely to pay off a million-dollar home loan in five years so that investment property is not going to be producing any income and it will be cash flow negative.

This is the time to pay down debt, not acquire more assets that increase your debt.

Mistake 5: Holding on to assets too long

The years leading up to retirement present a good opportunity to start consolidating assets.

People without a clear understanding of their tax situation may defer selling assets like residential investment properties until they’re retired.

The typical view is that they will pay less tax that way.

Yes, there may be less tax on the sale but the difference between selling while working or when retired can be minimal compared to the value of the property.

It is more important to sell the property when markets are strong and the price can be maximised, even if retirement is still five years away.

Mistake 6: Listening to your mates

We naturally turn to our friends, family and colleagues for advice and to compare notes, but what works for them may not work for you.

Everyone on the cusp of retirement has different risk appetites, goals, objectives, partners and financial situations.

Take, for example, buying an investment property at 58. A financial adviser’s response to your friend hoping to retire in five years is going to be completely different to the response you’ll receive if you and your partner plan to work for another 12 years and your combined income can comfortably accommodate the repayments.

The first step on the road to retirement is to choose a trusted travel companion.

The 2026 Retirement Confidence Study found that people who received financial advice were 50% more confident about making informed retirement decisions than those who didn’t.

Any information in this article is general in nature and does not consider any of your personal objectives, financial situation and needs. It is as intended, to be of a general nature only and NOT a recommendation to you. You should consider whether the information is appropriate to your needs, and where appropriate, seek personal advice from a registered financial adviser.