Steer clear of these common financial blunders during your retirement years.
Financial planning for retirement doesn’t stop once you’ve retired. Throughout your retirement years, it’s necessary to employ smart money management strategies and avoid common financial pitfalls that could erode your savings.
We are here to help you find and maintain a balanced financial approach during these years, so that you can achieve long-term financial security and live the retirement you’ve always envisioned.
Here are five common retirement mistakes to avoid:
1. Overspending
Retirement often comes with the joys of more free time and flexibility — which may make it easier to overspend. And in the early retirement years, especially, your expenses can add up as you adjust to a new lifestyle, such as more events with grandchildren, a home renovation, big-ticket hobbies or travel.
Additionally, inflation — even at lower levels of 2 to 3% — can further erode your purchasing power over time and increase the overall amount that you may be spending in retirement.
 | How to stay on track: Create a sustainable retirement budget for essential and lifestyle spending. Then work with my team to create a personalized strategy for investments and retirement income. |
2. Failing to revisit your withdrawal rate
Historically, a properly diversified retirement portfolio could typically sustain withdrawals of about 4% per year, adjusted annually for inflation, for approximately 30 years. However, this isn’t a one-size-fits-all number, and your withdrawal rate may need to change as personal and external circumstances change.
For example, during a market downturn, it may make sense to temporarily limit withdrawals to allow your investments to recover. Or perhaps you need to increase your withdrawal rate to satisfy the required minimum distributions (RMD) mandate from the IRS. Overall, your withdrawal rate should account for your current finances, future income, goals, the external environment and other considerations unique to you.
 | How to stay on track: Regularly review your withdrawal rates with my team. This is a smart way to keep an eye on how current stock prices and the rate of inflation may impact returns in your investment portfolio. The ability to adjust your retirement income level based on market conditions and your circumstances can help you address uncertainty or the unexpected. |
Advice spotlight
Make your retirement income withdrawal strategy tax-efficient.
Consider how different sources of income are taxed when taking retirement distributions. For example, in years when your tax rate is higher, you might increase distributions from investments in tax-free accounts, such as a Roth IRA.
3. Underestimating medical expenses
Medicare is a valuable program for many retirees, but it wasn’t designed to cover health care expenses in full. In some cases, premiums, deductibles and copayments for covered services may become significant. Further, Medicare does not cover the cost of care for dental, vision and hearing conditions, or long-term care. Overall, underestimating these expenses may mean you’ll have less to spend on discretionary pursuits and other lifestyle interests.
 | How to stay on track: We can help you plan for retirement health care costs and identify solutions, like long-term care insurance, to keep your medical expenses in check. |
4. Taking Social Security at the wrong time
Because Social Security income lasts your entire life, deciding when to file for it is key. You can begin receiving this federal benefit as early as age 62 — but in doing so, your monthly benefits may be reduced for life. If you’re able to wait to collect benefits, it can be worth it in the long run. However, everyone’s situation is unique, and waiting may or may not be the right choice for you.
 | How to stay on track: Work with us to start planning your Social Security income strategy early. We can help you decide on an approach that considers your tax situation, life expectancy and other retirement income sources. |
5. Retiring too soon
Retiring early is a common aspiration for many, but this goal requires intentional planning to account for the longer time horizon. Early retirement requires you to have more assets to pay for essential and lifestyle expenses, account for inflation and self-fund your health care before you are eligible for Medicare at age 65.
There are also other impacts that could potentially set you back financially. For example, if you choose to retire at a younger age, it could result in lower Social Security benefits due to lower lifetime earnings. Or, if you take an early withdrawal from your retirement accounts to fund an early retirement, you may be subject to a 10% penalty and taxes.
 | How to stay on track: If early retirement is a priority for you, we can show you what it may take to get there, make personalized recommendations and review your portfolio to help support your desired retirement timeline and goals. |
Retirement planning calculator
Use this tool to get an idea of how long your funds are expected to last in retirement.
Run the numbersStay more confident throughout retirement
My team is here to help you stay on track throughout your retirement and can help you avoid these common financial mistakes.