Planning for retirement in Malibu comes with its own unique rhythm. Yes, the ocean views, relaxed mornings, and salt-air breezes set the stage for a picturesque chapter of life — but behind that serenity is a reality: Malibu is an expensive place to maintain the lifestyle most residents cherish.

After advising clients for nearly three decades, I’ve seen the same retirement planning mistakes happen again and again, especially in high-cost coastal communities. The good news? Every one of these mistakes is avoidable with awareness and smart planning.

Let’s walk through the most common retirement missteps Malibu residents make — and how you can sidestep them with confidence.

1. Underestimating the True Cost of Malibu Living

Malibu isn’t just a location — it’s a lifestyle. And that lifestyle comes with a premium.

Where People Miscalculate:

• Property taxes and insurance
• Home maintenance for ocean-front/near-ocean environments
• Healthcare costs
• Higher cost of groceries, services, and utilities
• Lifestyle spending (dining, recreation, travel)

How to Avoid This Mistake

• Build a realistic cost-of-living model based on today’s bills, not old assumptions.
• Plan for inflation at higher-than-average rates due to local pricing trends.
• Recalculate your budget annually — Malibu costs change fast.

2. Relying Too Heavily on Home Equity

Many Malibu residents have substantial home equity, but that doesn’t automatically translate into retirement security.

The Problem

People assume:
“My home is worth millions — I’m set.”

But high property values don’t pay your monthly bills unless you tap them.

Better Strategy

• Treat your home as an asset, not a retirement plan.
• Decide early whether you will:
  • Downsize
  • Rent part of the property
  • Use a reverse mortgage (only in specific circumstances)
• Include home liquidity decisions directly in your retirement plan.

3. Not Diversifying Enough Beyond Real Estate

Malibu households often hold the majority of their net worth in property. This creates a dangerous imbalance.

Why This Is Risky

• Real estate is illiquid
• It’s subject to market swings, especially in luxury sectors
• It can’t provide consistent monthly income

The Fix

• Rebalance into:
  • Income-producing portfolios
  • Tax-efficient retirement accounts
  • Dividend strategies
• Maintain multiple income streams, not just property appreciation.

4. Forgetting to Plan for Healthcare Costs

A coastal lifestyle doesn’t slow the rising cost of healthcare. Malibu retirees are often shocked by their real medical spending.

Common Oversights

• Underestimating Medicare premiums
• Forgetting supplemental insurance
• Not planning for long-term care
• Ignoring out-of-pocket medical costs

Avoid It By:

• Allocating a dedicated healthcare bucket
• Considering long-term care insurance early
• Using conservative estimates for future medical spending

5. Overspending Too Early Into Retirement

When you retire in a beautiful place like Malibu, it’s easy to slip into a carefree, vacation-like spending mode.

Typical Early Retirement Splurges

• Remodels
• Luxury travel
• Gifting to family
• New vehicles
• Wellness or fitness programs
• Dining out lifestyle increases

Better Approach

• Set a monthly spending plan
• Follow a structured withdrawal strategy
• Reassess annually to prevent “lifestyle creep”

6. Not Accounting for Taxes on Retirement Income

Even wealthy retirees get tripped up by tax surprises.

Things Many Malibu Residents Miss

• Taxes on Social Security
• Taxes on IRA and 401(k) withdrawals
• Capital gains from selling property
• RMDs (Required Minimum Distributions)
• California’s higher-than-average tax burden

Smart Move

• Run a multi-year tax plan
• Mix pre-tax, Roth, and taxable accounts
• Time withdrawals strategically
• Consider partial Roth conversions earlier in retirement

7. Failing to Build an Emergency & Climate-Resilience Fund

Living on the coast means preparing for the unexpected.

Common Oversights

• Natural disaster repairs
• Insurance gaps
• Emergency relocation costs
• Higher premiums after wildfire seasons
• Temporary rental housing if repairs are needed

Prevention

• A larger-than-normal emergency fund
• Annual insurance review
• A separate fund for climate-related risks

8. Not Stress-Testing Their Retirement Plan

One of the biggest mistakes is assuming everything will stay steady — markets, health, income, expenses.

Why Stress-Testing Matters

It answers:

• What if markets drop 20%?
• What if healthcare doubles?
• What if property taxes rise?
• What if you or your spouse require long-term care?

How to Do It

• Run annual simulations
• Adjust spending and withdrawals
• Rebalance portfolios based on risk
• Update tax strategy each year

Stress-testing removes uncertainty and brings peace of mind.

9. Avoiding Professional Guidance Until It’s Too Late

Many Malibu residents wait until:

• A market downturn
• A retirement date that snuck up
• An unexpected expense
• Or a health issue

But retirement is complex — especially in a high-cost coastal environment.

What a Good Advisor Helps With

• Designing a retirement budget
• Building income streams
• Managing taxes
• Setting healthcare strategies
• Protecting assets
• Reducing emotional decision-making

Your retirement shouldn’t be a guessing game.

Final Thoughts

Malibu is a dream location — but without smart planning, its costs can turn into a nightmare.

Avoiding the common mistakes above can mean the difference between a retirement filled with stress and one filled with the calm, freedom, and oceanfront-style ease Malibu is known for.

The formula is simple:

• Understand your real costs
• Diversify your income
• Plan for healthcare
• Manage taxes
• Keep your plan updated
• Get expert support

Your retirement should feel like a Malibu morning — calm, bright, and full of possibility. And with the right planning, it can.