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6 Common Retirement Mistakes to Avoid

Updated: Aug 9, 2023

By: George Jameson, CFP®, MBA


Retirement is supposed to be a time of fun and relaxation, but it can quickly turn into a financial nightmare if you're not careful. There are many common financial mistakes that retirees make. In this blog, we'll explore 6 mistakes I see retirees making in retirement and offer tips on how to avoid them.



1. Underestimating Home Repairs and Maintenance: can quickly derail your retirement budget. Many retirees underestimate the costs of minor and major home repairs and maintenance. As homes age, they require more maintenance, and the cost of repairs can quickly add up. To avoid this mistake, make sure to include an extra cushion for unexpected and future known home related expenses. Especially for larger expenses such as a new roof and HVAC. You may also want to do a home inspection every few years to identify any potential problems before they become major issues.


2. Overly supporting your adult children: Many retirees feel a sense of obligation to help their children financially, but this can quickly drain retirement savings and put retirees in a difficult financial position. To avoid this mistake, it's essential to set clear boundaries and expectations with your adult children.


Let them know what you can and can't afford to do and encourage them to be financially independent. It's also a good idea to have a plan in place for emergencies or unexpected expenses, so you're not caught off guard if your children need help.


3. Failing to plan for healthcare costs: Healthcare costs can be a significant expense in retirement, and failing to plan for them can have a major impact on your finances. Make sure to factor in the cost of healthcare when creating your retirement budget and consider purchasing long-term care insurance.



4. Withdrawing too much from retirement accounts: Many retirees make the mistake of withdrawing too much money from their retirement accounts too soon, which can deplete their savings faster than expected. Make sure to create a withdrawal plan that takes into account your expected income and expenses in retirement.


5. Investing too conservatively: While it's natural to want to protect your retirement savings, investing too conservatively can lead to lower returns and a smaller nest egg. Consider educating yourself on investing in retirement or find a "fee only" financial planner to help create an investment strategy that balances risk and return.


6. Not downsizing: Many retirees make the mistake of holding on to a large home or expensive possessions that they no longer need or can afford. Downsizing can free up cash to cover expenses in retirement and allow you to enjoy a simpler, more manageable lifestyle.


Retirement can be a time of peace and relaxation, but it can also come with financial challenges and pitfalls. By avoiding common financial mistakes such as underestimating home repairs and maintenance, overly supporting adult children, failing to plan for healthcare costs, withdrawing too much from retirement accounts, investing too conservatively, and not downsizing, when necessary, you can enjoy a more secure and comfortable retirement. Remember to plan ahead, create a budget, and seek advice from financial experts as needed. With the right strategies in place, you can avoid financial stress and enjoy the retirement of your dreams.


Learn more about "Capital Wealth Group" and George Jameson, CFP®, MBA, a financial advisor based in Columbia, SC, Click Here.

George can be reached at (803) 250-6464 or george@capitalwealthplan.com


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