Retirement expert explains how to avoid common planning mistakes

Updated Sun, Mar 23, 2025, 9:34 AM 7 min read

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When planning for the future, people often get caught up in short-term news rather than focusing on the long-term strategy, even though retirement planning can stretch across decades.

And that’s just one of several mistakes those saving for or living in retirement are making, according to Nick Nefouse, global head of retirement solutions and head of LifePath at BlackRock.

“If I think about retirement planning, it is almost always a long horizon,” Nefouse said in a recent episode of Decoding Retirement (see video above or listen below). “And what we do is we get inundated with short-term news. And if you think about short-term news versus planning for retirement, they're two very different things.”

Consider that a person in their 20s will spend about 45 years saving for retirement. Then, upon reaching 65, they can expect to live another 20 to 30 years on average. Combined, this represents a significant time frame for financial planning. Even someone who is 55 still has about a decade before retiring.

“The reason why time horizon is so important is the longer that you're in the markets, the better the probability you're going to be successful,” he said. “But if we have this short horizon view of what's going to happen next year or next quarter, it tends not to bode very well for long-term investing.”

Nefouse also suggested that individuals often make mistakes regarding risk. “We tend to think of risk myopically just as market risk,” he said.

Instead, risk should be viewed as a lifecycle concept, encompassing market risk, inflation risk, longevity risk, human capital risk (job loss), and sequencing risk (bad market returns). What’s more, individuals need to consider that risk evolves over one’s lifetime.

At BlackRock, a model they espouse is something called GPS — grow, protect, spend.

“When you're young, it's just about maximizing growth,” he said. “And this is where you want to have the highest equity waiting in your portfolios. Really lean into growth equities. This is in your 20s, 30s, even into your 40s. From about mid-40s up until you're in retirement we really want to start adding in more protection. This is when you want to start thinking about diversifying a portfolio into things like inflation protection or into fixed income.”

Read more: Retirement planning: A step-by-step guide

When you retire with a lump sum at 62, 65, or 67, there’s little guidance on how to systematically draw down assets, and many avoid even thinking about "decumulation," Nefouse said. As a result, retirees tend to fixate on their account balance, reluctant to spend it. They'll use capital gains and income but resist dipping into the principal itself.