One of the top concerns for retirees is the fear of running out of money in retirement. In this post, we’ll explore five common mistakes retirees make that can jeopardize their financial security in retirement, along with practical solutions to avoid them.


Underestimating Expenses

Before retiring, it’s crucial to plan how you’ll spend your time and the associated costs. Many retirees fail to account for the expenses of hobbies, travel, and leisure activities, leading to overspending. To avoid this mistake, take the time to map out your weekly activities and associated costs. This exercise can help you better understand your financial needs in retirement and plan accordingly.

Overspending on Big Purchases

While cutting back on small expenses like daily coffees can be beneficial, the real threat to retirement savings lies in overspending on big-ticket items such as luxury vehicles, home renovations, or recreational vehicles. These purchases not only drain your retirement nest egg but also come with additional expenses for maintenance and upkeep. Consider alternatives such as renting instead of buying to avoid putting strain on your finances.

Ignoring Sequence of Returns Risk

Market fluctuations can have a significant impact on your investment portfolio during retirement. Ignoring sequence of returns risk, which refers to the timing of market returns during the decumulation phase, can lead to depleting your savings prematurely. Ensure your investment portfolio is well-diversified and consider working with a financial advisor to develop a strategy that minimizes the impact of market volatility on your retirement income.

Neglecting Tax Planning

Taxes can eat into your retirement savings more than you might realize. Many retirees fail to account for taxes on their withdrawals from retirement accounts, leading to a higher-than-expected tax bill. Proper tax planning is essential to minimize tax liabilities over your lifetime. Explore strategies such as Roth conversions or tax-efficient withdrawal strategies to optimize your retirement income and reduce your tax burden.

Failing to Plan for Long-Term Care

Long-term care needs can pose a significant financial burden on retirees. Unfortunately, many people fail to plan for these expenses, assuming they won’t need long-term care or underestimating its cost. Studies show that a majority of individuals will require some form of long-term care in their later years. To mitigate this risk, consider purchasing long-term care insurance or exploring other options for funding potential care needs.


Retirement should be a time of relaxation and enjoyment, not worry about running out of money. By avoiding these common mistakes and implementing sound financial strategies, you can increase your chances of a financially secure retirement. Take the time to plan ahead, seek professional guidance when needed, and make informed decisions to safeguard your financial future in retirement.

The Retirement Recap

Join the 964+ other retirees and get weekly articles and videos to help you retire with confidence.
Subscribers also gain access to our private monthly client memo.

We will keep your email safe. You can unsubscribe at any time.

This does not constitute an investment recommendation. Investing involves risk. Past performance is no guarantee of future results. Consult your financial advisor for what is appropriate for you. Disclosures:

Retirement Recap.

Join the 1,000+ other retirees and receive weekly articles and videos to help you retire with confidence.

Subscribers also gain access to our exclusive monthly client memo that we don't share anywhere else.

We don’t spam! You can unsubscribe at any time.