5 Mistakes That Can Drain Your Retirement Savings
You’ve spent decades building your nest egg — but how you manage it in retirement is just as important as how you built it. Unfortunately, many retirees unknowingly make costly mistakes that can shrink their savings far faster than expected.
Here are five of the most common missteps — and how to avoid them:
1️⃣ Withdrawing Too Much, Too Soon
It’s tempting to dip into your savings for travel, home upgrades, or to help family — but overspending early can leave you short in later years.
The fix: Follow a structured withdrawal strategy, like the 4% rule, which suggests withdrawing no more than 4% of your total savings each year, adjusted for inflation.
2️⃣ Ignoring Inflation
What costs $1 today might cost $1.30 or more in just a few years. If your investments aren’t keeping up with inflation, your purchasing power will quietly erode.
The fix: Keep part of your portfolio in growth-oriented investments, like dividend-paying stocks, to help offset rising prices.
3️⃣ Underestimating Healthcare Costs
Medicare doesn’t cover everything, and out-of-pocket healthcare expenses can add up quickly.
The fix: Consider Medicare supplement plans or Health Savings Accounts (HSAs) (if eligible before retirement), and budget realistically for medical needs.
4️⃣ Not Adjusting Your Portfolio
Too many retirees either stay too aggressive or go too conservative. Either can hurt.
The fix: Shift to a balanced allocation that includes cash for short-term needs, bonds for stability, and equities for long-term growth. Revisit your plan annually.
5️⃣ Paying High Fees
Investment and advisory fees, even as low as 1%, can cost you tens of thousands over time.
The fix: Choose low-cost index funds or ETFs. Ask your advisor to explain all fees — and compare options.
🧠 Final Thought
Retirement is a journey that lasts decades. A few smart adjustments today can help ensure your savings go the distance — providing peace of mind and financial freedom well into the future.
Stay informed. Stay in control. And avoid the traps that catch too many retirees by surprise.