{"id":766331,"date":"2026-06-28T19:57:24","date_gmt":"2026-06-28T19:57:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/766331\/"},"modified":"2026-06-28T19:57:24","modified_gmt":"2026-06-28T19:57:24","slug":"kevin-oleary-issues-sobering-401k-reminder-to-workers","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/766331\/","title":{"rendered":"Kevin O\u2019Leary issues sobering 401(k) reminder to workers"},"content":{"rendered":"

Contributing to a 401(k) every paycheck may not be enough to avoid a retirement<\/a> shortfall, especially if key planning gaps go unaddressed.<\/p>\n

Kevin O\u2019Leary<\/a>, the Shark Tank<\/a> investor has critical advice for workers who treat their 401(k) as a full retirement plan, FinanceBuzz reported<\/a>.<\/p>\n

O\u2019Leary argues that spending habits, not investment selection, are what determine whether a worker retires on schedule or falls behind. <\/p>\n

He says too many workers ignore consumer debt, underestimate health care costs, and count on Social Security as a backstop that may not hold.<\/p>\n

His warning arrives alongside fresh data from federal agencies and Fidelity Investments that reveals just how thin those assumptions have become.<\/p>\n

O\u2019Leary says consumer debt is draining retirement savings before they compound<\/p>\n

The Shark Tank investor has repeatedly stressed that high-interest consumer debt is the single biggest obstacle to a funded retirement for workers.<\/p>\n

Workers who carry credit card balances pay more in interest than most retirement accounts generate in annual growth, with average credit card rates exceeding 22%, according to Federal Reserve data<\/a>.<\/p>\n

Individual Americans now carry an average of $105,444 in total consumer debt, with credit card balances alone averaging $6,768, according to Experian data<\/a>.<\/p>\n

O\u2019Leary\u2019s position is direct: Eliminate high-interest debt first so that freed-up cash can flow toward long-term savings and compound over decades.<\/p>\n

He has described the cycle as a trap in which monthly interest payments replace the very contributions that would generate compound growth over a full career.<\/p>\n

Pairing high-interest debt with active retirement savings<\/a> means workers also face a separate temptation: tapping their 401(k)s<\/a> to clear balances, which AARP has warned<\/a> can cost them decades of compound growth.<\/p>\n

Workers who do not track monthly spending are unlikely to find the extra dollars needed for meaningful retirement contributions, O\u2019Leary has noted.<\/p>\n

Health care costs could swallow what a 401(k) alone cannot cover<\/p>\n

Even workers who consistently save in their 401(k)<\/a>s may underestimate one of the largest expenses they will face after leaving the workforce.<\/p>\n

A 65-year-old retiring in 2025 can expect to spend an average of $172,500 on health care and medical expenses throughout retirement, according to Fidelity Investments<\/a>.<\/p>\n

That figure rose more than 4% from the previous year\u2019s estimate of $165,000, and it does not include long-term care costs, Fidelity noted.<\/p>\n

More Retirement:<\/p>\n

The estimate assumes enrollment in original Medicare Parts A, B, and D, and it accounts for premiums, deductibles, coinsurance, and prescription drug expenses.<\/p>\n

Since Fidelity<\/a> first estimated the cost at $80,000 in 2002, the projected expense has more than doubled over roughly two decades of above-average health care inflation<\/a>.<\/p>\n

O\u2019Leary has pointed to rising medical expenses as evidence that workers need multiple income streams in retirement, not a single account balance.<\/p>\n

One in five Americans has never considered health care costs during retirement, a figure that climbs to one in four among Generation X, Fidelity found.<\/p>\n

That gap between what people think and what\u2019s actually true is exactly the problem O\u2019Leary\u2019s retirement warnings are meant to highlight.<\/p>\n

\"RetiredRising medical expenses could consume a significant portion of retirement savings, even for diligent 401(k) contributors.Halfpoint Images\/Getty Images<\/a><\/p>\n

Social Security\u2019s safety net is shrinking faster than projected<\/p>\n

Workers who count on Social Security<\/a> to fill gaps in their retirement savings face a rapidly deteriorating outlook, according to the latest government report.<\/p>\n

The Old-Age and Survivors Insurance trust fund is projected to be depleted by the fourth quarter of 2032, according to the 2026 Trustees Report<\/a>.<\/p>\n

When that fund runs dry, continuing payroll tax revenue will cover only 78% of scheduled retirement benefits, the Social Security Administration confirmed.<\/p>\n

The Committee for a Responsible Federal Budget<\/a> estimated in a June 2026 report that an automatic 24% cut, the figure projected at the time of its analysis, would reduce average monthly payments by roughly $500. <\/p>\n

The 2026 Trustees Report has since revised the projected cut down to 22%, implying a somewhat smaller monthly reduction at current benefit levels.<\/p>\n

That timeline accelerated by one quarter from earlier 2033 to the fourth quarter 2032, reflecting the impact of new tax legislation and shifting demographic trends.<\/p>\n

The program supports nearly 71 million beneficiaries, and the projected shortfall carries broad implications for workers at every income level.<\/p>\n

Myechia Minter-Jordan, CEO of AARP, issued a direct call <\/a>for congressional action following the release of the 2026 Social Security Trustees Report. <\/p>\n

This should be a wake-up call: Congress needs to act. Americans have worked hard and paid into Social Security their entire lives, and they deserve to count on it when they retire. No family should see any cuts to what they’ve earned in Social Security.<\/p>\n

Myechia Minter-Jordan<\/p>\n

AARP CEO<\/p>\n

O\u2019Leary has stressed that the program was never intended to serve as a worker\u2019s sole source of income, a point reinforced by its own financial projections.<\/p>\n

Still, only 14% of 401(k) participants maxed out their employee deferrals in 2024, according to Vanguard\u2019s 2025 How America Saves report<\/a>.<\/p>\n

The 2026 contribution limits raise the savings ceiling for late-career workers<\/p>\n

The Internal Revenue Service<\/a> raised the 401(k) employee contribution limit to $24,500 for 2026, up from $23,500 the previous year.<\/p>\n

Workers aged 50 and older can add $8,000 in catch-up contributions on top of the standard limit, bringing their total possible deferral to $32,500.<\/p>\n

Workers aged 60 to 63 can raise their catch-up to $11,250 under the SECURE 2.0<\/a> Act, for a total maximum of $35,750, the IRS<\/a> confirmed.<\/p>\n

In a June 2025 video message<\/a> to his own children, O\u2019Leary put his retirement philosophy plainly: \u201cDon\u2019t spend it. Save it. Invest it. Let it compound.\u201d<\/p>\n

The 2026 contribution limits give workers who have paid off high-interest debt more room to save for retirement.<\/p>\n

About the authors\"\"<\/p>\n

Damilola Esebame is a finance journalist and CFEI\u00ae whose work spans credit, taxes, retirement, and budgeting. At TheStreet, he covers personal finance news and policy changes that affect your wallet, making complex topics clear and actionable.<\/p>\n

\"\"<\/p>\n

Celine is a writer and editor with over 20 years of experience and has covered diverse news, features, academic\/research, and legal topics. At TheStreet.com, Celine is a senior editor with experience across retail, stocks, investing, personal finance, technology, the economy, and travel.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Contributing to a 401(k) every paycheck may not be enough to avoid a retirement shortfall, especially if key…\n","protected":false},"author":2,"featured_media":766332,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[365034,1778,365041,365033,64,63,99,365039,64089,365031,186,61282,353482,365036,365040,184,185,1793,271248,365030,365032,365037,365035,365029,2310,365038,6624,5571],"class_list":["post-766331","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-2026-401k-contribution-limits","tag-401k","tag-401k-retirement-planning","tag-aarp-retirement-warnings","tag-au","tag-australia","tag-business","tag-consumer-debt-impact-on-retirement","tag-debt-management","tag-fidelity-retirement-healthcare-costs","tag-finance","tag-financial-planning-for-retirement","tag-healthcare-costs-in-retirement","tag-high-interest-debt-elimination","tag-kevin-oleary-retirement-advice","tag-personal-finance","tag-personalfinance","tag-retirement","tag-retirement-income-streams","tag-retirement-investment-growth","tag-retirement-savings-statistics","tag-retirement-savings-strategies","tag-retirement-shortfall-risks","tag-shark-tank-investor-retirement-tips","tag-social-security","tag-social-security-retirement-benefits","tag-work","tag-workplace"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/766331","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=766331"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/766331\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/766332"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=766331"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=766331"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=766331"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}