7 Retirement Traps You Must Avoid in 2026 (Part 2)

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Welcome to the One of a Kind Financial Show Daily with your host, Mike Milligan. And whoa, the last 2 days for some felt like they went slow as molasses running over pancakes, and others with the speed of that little kid in The Incredibles. Some of us are exhausted, some of us Need interaction. So Retirement Traps Part 2. See, Monday of this or Tuesday of this week on the One of a Kind Financial Show Daily, Gary and I talked about traps that people face. And today we're going to continue that and go over even more traps. See, in Part 1, we talked about the planning missteps that quietly chip away at your retirement. But now we're going to go even deeper into the traps that come after your retirement begins, from portfolio blind spots to healthcare shocks to costly Social Security timing mistakes. Today's conversation is about protecting what you've built.

In retirement, the stakes are high, but the danger is always dramatic. Some of the best financial setbacks come not from market crashes, but from inaction, outdated thinking, or simple misalignment between your plan and reality. Now, in the second part of our 2-part series, we're exploring the next 4 traps, highlighted by a recent Forbes article, How to Spot Them, Fix Them, and Future-Proof Your Retirement for the Long Run. Trap number 4, putting all your eggs in one basket. Why does diversification still get ignored by smart retirees, Mike?

Uh, many people enter retirement with concentrated holdings, whether that is employer stock, real estate, or even a heavy bias toward one sector or region So one sector of the market or one region around the world. It's often out of loyalty or fear of taxes or just inertia. And so the risk here is that without real diversification, one market downturn, even in one segment of the overall market, could impact total assets, which could then have a trickle impact down to retirement income, and then even further impact down to your, your mental health when it comes to retirement.

So what does modern diversification look like in retirement?

Well, this article recommends going beyond stocks and bonds. It, it talks about going into asset types, geographies, and even investment strategies. So a resilient portfolio in retirement looks more like your diversification between, as opposed to a stock and bond diversification, your retirement diversification should be about the, your portfolio should be about the income you need to hit your basic expenses, money allocated to income you want to do the things you want. Another slice of the pie of your investment pie should be for long-term care expenses or healthcare expenses in the future. And then the last part of your investment allocation in retirement should be to the legacy, that which you want to leave behind to either protect a spouse, your kids, or charity.

All right, let's get to trap number 5, clinging to old strategies. What worked in 2005 might not work now because that was a long time ago.

And that's exactly what I was just talking about, Gary, is like, you know, back in, back in the '70s and '80s and '90s, Modern Portfolio Theory the strategy of diversification of stocks and bonds really came out. And then Bill Bengen put out his study, his paper in the Journal of Financial Planning in 1994 that introduced safe withdrawal rates of 4%.

Yep.

And then tax law started changing. During the Clinton administration, Roth IRAs were introduced. We had tax rate changes during the Bush, the second Bush presidency. During Obama, net interest income was suggested, was brought out. The Tax Cuts and Jobs Act through Trump's first presidency, SECURE Act during Biden. And here we are again with the extension. See, things change. And when you cling to something that was implemented, like say when Ronald Reagan was president, Yeah. it doesn't work in the world we live in today. And so those old strategies can actually cause you harm when it comes into retirement. So a set-it-and-forget-it syndrome or strategy is not how we attack retirement now in 2025, going into 2026 and beyond.

Mm-hmm. The show is the One of a Kind Financial Show. I'm Gary Nolan, your consumer advocate. Mike's going to talk about the One of a Kind Financial Plan again in just a couple of minutes. Nothing changes till you pick up the phone and dial this number. Here it is. 800-748-1838. 800-748-1838. Or text the word ideas to 600-700. Do it right now. The folks at One Oak Financial standing by this weekend, ready for your phone call. Mike's going to be on the phones himself this weekend. 800-748-1838. Or text the word ideas to 600-700. You deserve a more confident plan to retire. Want to be stress-free? Peace of mind starts by picking up the phone and dialing this number. Trap number 6. Underestimating healthcare and longevity risks, the 2 biggest wildcards.

You know, personal, personal story here, Gary, is, you know, my, my grandmother down in Laurinburg, North Carolina, was in a Medicaid facility at the end of her life. She started out as a self-funded facility up in Hamlet, North Carolina. But after our family ran out of money that we had accumulated for so long and we ran out of some long-term care insurance that we bought for her, She had to go into a Medicaid facility. We saw firsthand the implications of a long, a long bout with dementia for my grandmother. And the averages, like Fidelity says that a couple should have, I think at 65, they should expect about $320,000 of out-of-pocket expenses.

That's what I've heard.

Yeah. For healthcare and long-term care. You know, my grandmother was above that number because of her long-term. See, that number, that $320,000 is an average number. You know, some people are going to spend a whole lot more than that. Some people are going to spend a lot less. But, you know, to prepare for that, we have things now that we did not have back in, you know, the late '90s. We have health savings accounts for, uh, to, we have long-term care insurance policies, we have hybrid policies, and we have buffered strategies that are all options that most people don't even know exist. And if healthcare or long-term care are a concern of yours, we should really be talking about how do we safeguard your wealth and your family from you being a burden on them at the end of your life.

All right, Mike, we're up against the clock. Tell us about the one-of-a-kind financial plan that you designed.

One Oak Financial. One Oak stands for one of a kind. We are here to create a financial plan that is about you. It's not about who we are. It's not about the investment plans we have created, the models. It's not about our fee. It's not about our system. Our financial plan is about you. The one of a kind financial plan is built around reducing your lifetime taxes, Creating a retirement income you cannot outlive. An investment strategy that pairs your risk and your ability to sleep at night with what's available in the marketplace. A long-term care strategy where the younger version of you takes care of the older version of you so that you end life with dignity. And a legacy plan that says, I love you, to the next generation. Gary, it's an honor to have built so many financial plans in 2025 for folks who have called into the show. And we still have time in 2025 to build a couple more for people who call in today. So I look forward to answering the phone for those who call. Tell them how they can get in contact with us.

Yeah, Mike, happy to do so. 800-748-1838. 800-748-1838. Or text the word ideas to 600-700. You heard from Mike himself. He's going to be manning the phones this weekend. 800-748-1838. Or text the word ideas to 600-700. Get yourself all set up with that comprehensive plan, no cost or no obligation.

Thank you for listening to this episode of the One of a Kind Financial Show Daily. This is for educational purposes only. Any comments that Mike Milligan and Gary Nolan make on the One of a Kind Financial Show are those the express thoughts of them and should not be construed as recommendations from Advisory Alpha LLC. Mike is an investment advisory rep with Advisory Alpha LLC. Ideas by Mike doing business at As One Oak Financial is an insurance agency educational platform and is unaffiliated with Advisory Alpha.

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