Building a comfortable retirement takes decades of planning, but the financial decisions you make in the years leading up to retirement can have an even greater impact on your long-term security.

While many people focus on growing their 401(k) or IRA balances, retirement planning involves much more than reaching a savings target. Future retirees must determine the right time to leave the workforce, estimate how their expenses will change, and create a strategy that allows their savings to support them throughout what could be several decades of retirement.

Financial expert Dave Ramsey says many Americans over the age of 55 make the same costly mistakes during this critical period. In an interview with Kiplinger, the bestselling author and radio host highlighted three common financial pitfalls that can jeopardize retirement plans. One of the biggest concerns, he says, is entering retirement burdened with debt.

Mistake #1: Carrying Too Much Debt Into Retirement

According to Ramsey, too many Americans assume they can continue managing debt after they stop working, without realizing how much it can strain a fixed retirement income.

Research cited by AARP shows that debt among older Americans has increased dramatically over the past three decades. Between 1992 and 2022, the average debt carried by households led by adults aged 65 to 74 climbed to approximately $45,000, while households headed by people aged 75 and older saw their average debt rise to about $36,000.

Ramsey believes this trend is troubling because many retirees continue making mortgage and vehicle payments long after their paychecks have ended.

"They hang onto debt—especially mortgages and car payments—and assume they'll simply manage those payments in retirement," Ramsey explained. "The better approach is to eliminate as much debt as possible before leaving the workforce."

Prioritize Paying Off Debt

Ramsey encourages pre-retirees to aggressively reduce outstanding balances while they still have employment income. Doing so can free up cash flow during retirement and reduce financial stress when living on savings, pensions, or Social Security benefits.

Two of the most widely used debt-repayment strategies include:

• The Avalanche Method: Focus extra payments on the debt with the highest interest rate while continuing to make minimum payments on all other balances. Once the highest-interest debt is eliminated, move to the next one. This strategy minimizes total interest costs over time.

• The Snowball Method: Pay off the smallest debt first regardless of interest rate, then roll those payments into the next-smallest balance. While it may not save as much in interest, many people find the quick wins motivating and easier to maintain.

Regardless of the method chosen, Ramsey's message is clear: reducing or eliminating debt before retirement can strengthen financial stability and provide greater flexibility during the retirement years.

For those approaching retirement, minimizing debt is one of the most effective ways to protect savings and improve long-term financial security.