By Wesley Howard Triani

Retirement is supposed to be the time when you finally get to enjoy the fruits of your labor. But too often, I see retirees making financial mistakes that put their hard-earned security at risk. After working with clients for over 43 years, I’ve seen the same pitfalls arise again and again. Fortunately, with the right planning, these missteps can be avoided.

Let’s go over some of the most common mistakes people make in retirement—and how you can sidestep them to ensure a stable and enjoyable future.

1. Underestimating Retirement Expenses

Many retirees assume their expenses will drop significantly once they stop working. While some costs—like commuting and work-related expenses—may decrease, other costs often rise. Medical expenses, home maintenance, and leisure activities can quickly add up.

How to Avoid This Mistake:

Create a realistic retirement budget based on your expected expenses. Factor in:

• Healthcare costs, including Medicare premiums and potential long-term care needs.
• Inflation, which can erode the value of your savings over time.
• Travel, hobbies, and entertainment—retirement is supposed to be enjoyable, after all!

A clear budget will help you plan for these expenses and avoid financial strain down the road.

2. Claiming Social Security Too Early

It’s tempting to start collecting Social Security as soon as you’re eligible at 62. However, doing so can significantly reduce your lifetime benefits. If you claim early, your monthly check will be permanently reduced compared to what you’d receive by waiting until full retirement age (or even longer).

How to Avoid This Mistake:

• If possible, delay claiming benefits until at least full retirement age (66-67, depending on birth year).
• If you wait until age 70, your benefits will increase by about 8% per year.
• Consult with a financial professional to develop a Social Security strategy that fits your overall retirement plan.

Maximizing your Social Security benefits can provide you with more financial flexibility later in life.

3. Not Having a Withdrawal Strategy

Many retirees withdraw money from their retirement accounts without a solid plan, leading to unnecessary taxes and a higher risk of running out of money.

How to Avoid This Mistake:

• Use a strategic withdrawal plan, such as the 4% rule, which suggests withdrawing no more than 4% of your retirement savings each year.
• Prioritize withdrawals from taxable accounts before tapping into tax-advantaged retirement accounts.
• Be mindful of required minimum distributions (RMDs) once you reach age 73 to avoid hefty tax penalties.

A well-thought-out withdrawal strategy ensures your savings last as long as you need them.

4. Ignoring Healthcare and Long-Term Care Costs

One of the biggest mistakes retirees make is failing to prepare for healthcare expenses. Medicare does not cover everything, and long-term care costs can quickly drain your savings.

How to Avoid This Mistake:

• Factor in Medicare costs, including premiums, deductibles, and out-of-pocket expenses.
• Consider purchasing long-term care insurance to protect against the high cost of assisted living or in-home care.
• Set aside an emergency fund specifically for healthcare-related expenses.

Planning ahead for medical costs will help you avoid financial stress later in life.

5. Overlooking Estate Planning

Too many retirees fail to put their estate in order, which can leave their families dealing with legal headaches and financial uncertainty. Estate planning isn’t just for the wealthy—it’s essential for everyone.

How to Avoid This Mistake:

• Work with an elder law or estate planning attorney to create a will, living trust, or other necessary documents.
• Set up a durable power of attorney so a trusted individual can manage your financial affairs if you become incapacitated.
• Establish a healthcare proxy and a living will to outline your medical preferences in case of an emergency.
• Regularly review and update beneficiary designations on retirement accounts and life insurance policies.

Proper estate planning ensures that your wishes are carried out and protects your loved ones from unnecessary complications.

6. Being Too Conservative (or Too Risky) with Investments

Some retirees shift their portfolios entirely to conservative investments like bonds or cash, which may not keep up with inflation. Others take on too much risk, hoping to grow their savings quickly, but end up losing money in volatile markets.

How to Avoid This Mistake:

• Maintain a balanced portfolio with a mix of stocks, bonds, and cash based on your risk tolerance and time horizon.
• Review your investments regularly and adjust as needed to keep your strategy aligned with your financial goals.
• Work with a financial planner to ensure your investment approach supports both short-term needs and long-term growth.

7. Failing to Adjust for Inflation

Inflation slowly erodes purchasing power over time. What seems like a comfortable retirement income today may not be enough 15-20 years down the road.

How to Avoid This Mistake:

• Keep a portion of your portfolio invested in assets that historically outpace inflation, such as stocks.
• Consider cost-of-living adjustments when estimating future expenses.
• Plan for gradual increases in your withdrawal rates while ensuring your money lasts.

8. Not Having a Financial Advisor or Planning Team

Many retirees try to manage their finances on their own, which can lead to costly mistakes. A strong financial plan involves collaboration with experts.

How to Avoid This Mistake:

• Work with a financial planner, CPA, and an elder law or estate attorney to ensure your finances, taxes, and legal matters are in order.
• Have regular check-ins with your financial team to adjust your plan as needed.
• Take advantage of free consultations to find professionals who align with your goals and needs.

A team approach ensures you have a well-rounded plan and professional guidance to navigate any unexpected challenges.

Final Thoughts

Retirement should be a time of enjoyment, not stress. Avoiding these common mistakes will help you make the most of your golden years while protecting your financial security.

The key is preparation—building a solid plan, working with the right professionals, and adjusting as life changes. By taking the right steps today, you can retire with confidence and peace of mind.

If you haven’t reviewed your retirement plan recently, now is the time to do so. Your future self—and your family—will thank you.