Common Mistakes to Avoid Without a Retirement Plan Trust Attorney

Retirement planning shapes how well your savings carry you through the years when work slows down. Many people fund 401(k)s or IRAs, yet small missteps can shave off years of comfort later on. At the Law Office of David S. Schleiffarth, LLC, in St. Louis, we focus on practical plans that protect families and their savings.

In this article, we walk through common mistakes and how a retirement plan trust attorney can help you steer clear of them. Our aim is simple: help you avoid costly gaps and put your hard-earned assets to work for you and your loved ones.

Why Retirement Planning Mistakes Are So Common

Life gets busy, and retirement can feel far away until it is not. People wait, then choices narrow, and fixing errors gets harder. Small issues snowball over time, especially with taxes, beneficiary forms, and distribution rules. This is how many retirement planning mistakes begin, even for people who have been consistent about saving.

Some folks believe that steady saving alone solves everything. Building retirement savings is important, but effective retirement planning goes further. It also considers taxes, estate planning goals, healthcare needs, and asset protection. In Missouri, the lack of a state estate or inheritance tax can create a false sense that tax planning is unnecessary, even though federal rules and long-term planning still matter for your financial future.

Without guidance from experienced legal advisors, people often miss how retirement accounts interact with trusts, wills, and nonprobate transfers. Missouri’s Nonprobate Transfers Law, under Chapter 461, allows certain assets to pass by beneficiary designation, but those designations must align with the rest of your estate planning strategy. When they do not, a mismatch can override a will, disrupt retirement goals, and lead to family conflict.

Working with a St. Louis retirement plan trust attorney helps identify these issues early. Coordinating retirement accounts, trusts, and beneficiary designations before problems are locked in supports long-term financial security and helps ensure your plan reflects how you want assets handled.

Next, we will look at the mistakes we see most often and how clear planning can help you avoid them and better protect your long-term plans.

Misunderstanding Retirement Accounts and Contribution Rules

Confusion around 401(k)s, IRAs, and other qualified retirement plans often leads to missed opportunities. Contribution limits change, plan rules evolve, and employer matching can be lost if contributions fall short. Over time, those missed dollars can significantly reduce retirement savings and weaken an otherwise solid retirement portfolio.

We frequently see confusion between traditional and Roth accounts. Traditional retirement accounts generally provide a tax break today, with withdrawals taxed as ordinary income in retirement. Roth accounts work the opposite way, using after-tax contributions but allowing tax-free withdrawals later if certain rules are met. Choosing between them without considering current income, future tax brackets, and long-term goals can create avoidable tax problems across your retirement years.

Before adjusting contribution levels or switching account types, it helps to compare key features side by side. This is especially true when deciding how a 401(k) or individual retirement account fits into your broader retirement planning strategy. The snapshot below outlines how common retirement accounts within qualified retirement plans are typically treated for tax and distribution purposes.

Account Snapshot and Tax Treatment

Another commonly overlooked tool is the health savings account. When used correctly, an HSA can function as a supplemental retirement fund for healthcare expenses, offering tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical costs. Ignoring HSAs often means leaving valuable tax advantages unused, particularly as healthcare expenses rise later in life.

Some of the most common account-related mistakes we see include:

• Missing out on full employer matching contributions.
• Choosing Roth or traditional accounts without evaluating current and future tax brackets.
• Rolling old retirement plans into new ones without reviewing fees or investment options.
• Skipping catch-up contributions after age 50.
• Treating HSAs as short-term spending accounts rather than long-term planning tools.

These retirement planning mistakes often occur when decisions are made in isolation, without coordinated legal and financial guidance. While a financial advisor may focus on investment advice, a retirement plan trust attorney helps ensure account ownership, beneficiary designations, and contribution strategies align with your overall plan. With proper coordination, each retirement account supports your long-term goals instead of creating unintended conflicts.

Failing to Coordinate Retirement Planning With Estate Planning

Retirement planning and estate planning are meant to work together. Treating them as separate tasks is one of the most common retirement planning mistakes and often stems from neglecting estate planning until later in life. This disconnect frequently leads to confusion, delays, and unintended results for loved ones. In many cases, the solution begins with straightforward documents and properly aligned beneficiary designations that reflect your full financial situation.

Outdated beneficiary forms are a frequent problem. Retirement accounts typically pass by beneficiary designation, not through a will or revocable trust. If a 401(k) or IRA still names an ex-spouse or a deceased individual, that designation usually controls under Missouri law. We also see plans that fail to account for minor children, which can trigger court involvement and ongoing oversight, and delay access to retirement benefits.

Incapacity planning is another area that is often overlooked. Without a durable power of attorney and healthcare directives, access to retirement accounts and other retirement assets can be restricted if illness or disability occurs. Bills may go unpaid, and investments may sit unmanaged. A properly structured trust and supporting documents can allow a trusted person to step in and manage assets without interruption, preserving stability during an already difficult time.

To better align retirement and estate planning goals, it helps to review these areas regularly:

• Beneficiary designations on 401(k)s, IRAs, and life insurance policies.
• Coordination with a revocable living trust under Missouri Chapter 456.
• Powers of attorney that authorize retirement plan and investment transactions.
• Use of Missouri transfer on death or payable on death designations where appropriate.

When retirement assets are not properly coordinated with an estate plan, the result can include probate involvement, higher taxes for beneficiaries, and delayed distributions. While a financial advisor may focus on investment advice, clear legal coordination ensures those recommendations actually function as intended. With the right structure in place, your plan supports long-term financial security, and your retirement assets move smoothly according to your wishes.

Underestimating Healthcare and Long-Term Care Costs

Healthcare expenses are often one of the biggest and most overlooked surprises in retirement. Many people focus on daily living expenses while underestimating how healthcare costs and medical expenses can grow with age and longer life expectancy. This gap is a frequent issue among common mistakes when planning for retirement, and it can quickly put pressure on even well-funded savings during the retirement years.

Medicare provides important coverage, but it does not cover everything. Premiums, deductibles, prescription costs, and uncovered services can add up over time. Long-term care presents an even greater risk. A single year in a nursing facility, assisted living setting, or even extended in-home care can cost far more than many families anticipate, draining retirement accounts faster than expected and creating financial strain.

Another common assumption is that health insurance will cover most retirement healthcare needs. In reality, traditional health insurance and Medicare generally do not cover custodial care, which includes help with daily activities such as bathing, dressing, and eating. Without a plan, families are often forced to spend down retirement assets to manage these costs, leaving little room for unexpected expenses later on.

For Missouri residents, long-term care planning may involve MO HealthNet eligibility. Transfers made within the five-year look-back period can trigger penalties and delays in coverage. Without early legal planning, retirement assets may remain fully exposed and unavailable for protection strategies when care is needed most.

This area represents one of the most serious retirement planning mistakes to avoid. Legal planning, including the use of certain trusts and coordinated beneficiary strategies, can help limit the impact of long-term care costs on retirement savings. Planning creates more options, preserves flexibility, and helps ensure that healthcare needs do not undermine long-term financial security.

Ignoring Tax Consequences and Required Distributions

Taxes can quietly reduce retirement income if withdrawals are not planned carefully. Federal tax laws require minimum distributions, commonly called RMDs, to begin once you reach the retirement age set by Congress. Missing required minimum distributions can trigger significant penalties, and taking withdrawals without a plan can force you to pay taxes at higher rates than expected.

Timing mistakes are common. Some retirees delay withdrawals too long, while others take too much at once without considering the tax implications. Both approaches can increase taxable income in a single year, shrink a retirement nest egg faster than planned, and reduce how long savings last. Without a coordinated strategy, taxes often take a larger share of retirement income than necessary and weaken an otherwise solid retirement portfolio.

Tax-deferred accounts can also create challenges for beneficiaries. Under federal rules, such as the SECURE Act, many non-spouse beneficiaries must fully distribute inherited IRAs within ten years. Those forced withdrawals can compress income into a short window, increase the amount heirs must pay in taxes, and conflict with long-term legacy goals.

A flexible withdrawal strategy can help limit these problems and protect long-term financial security. Useful planning steps often include:

• Determining which accounts to draw from first based on tax treatment and cash flow needs.
• Evaluating whether partial Roth conversions make sense during lower-income years.
• Coordinating withdrawals with Missouri and federal tax brackets to avoid unnecessary spikes.
• Reviewing plans with a tax advisor to account for changing tax laws and personal circumstances.

Failing to account for these factors is a common retirement planning mistake that affects both retirees and their heirs. Integrating tax awareness into a long-term retirement planning service helps preserve retirement income, reduce surprises, and support smoother transfers to the next generation. With the right approach, retirement savings can last longer and be passed on with greater efficiency.

Waiting Too Long to Seek Legal Guidance

Delaying professional guidance is one of the most common retirement planning mistakes. As retirement approaches and account balances grow, decisions become more complex, and rules continue to change. Options that were flexible earlier can narrow or disappear, making certain corrections difficult or impossible and affecting your long-term financial future.

Many people rely solely on online tools, calculators, or generic checklists. While helpful for basic education, these tools rarely account for your family structure, tax situation, or how Missouri law applies to your documents. As a result, important details are often missed, including outdated beneficiary forms, inconsistent trust language, or gaps in incapacity planning. Even a brief legal review with experienced legal advisors can uncover issues that might otherwise go unnoticed.

Early legal guidance helps prevent small errors from compounding over time. Addressing issues before retirement begins often creates more choices and reduces the need for rushed decisions later.

To stay on track, it helps to follow a regular review schedule:

• Review beneficiary designations every two to three years and after major life events.
• Update powers of attorney and healthcare directives on a consistent cycle.
• Revisit RMD timing and withdrawal order each fall for the upcoming year.
• Adjust trusts and non-probate transfers when opening new accounts or acquiring property.

Working with a St. Louis retirement plan trust attorney allows you to course-correct early and avoid avoidable setbacks. Small adjustments made in advance often prevent costly fixes later and help keep your retirement plan practical, coordinated, and ready for real-life changes.

Plan With a Trusted St. Louis Estate Planning Attorney

Retirement planning mistakes often surface too late to fix. At The Law Office of David S. Schleiffarth, LLC, we help individuals and families across the greater St. Louis area align retirement accounts, trusts, and beneficiary designations with long-term goals and Missouri law. Our approach is practical, detail-driven, and built to hold up over time.

If you have questions about your retirement plan, trust structure, or future care planning, we are ready to help. Call 314-448-0527 or visit our Contact Us page to schedule a consultation. A careful review today can protect your savings and give you confidence about the years ahead.