Retirement investors sabotage themselves with seven common mistakes that become increasingly expensive once they stop working. Holding excessive cash ranks among the worst offenses, as inflation erodes purchasing power during decades of retirement. Failing to account for taxes drains returns that retirees desperately need to sustain their lifestyle.
The stakes shift dramatically in retirement. Working years offer time to recover from investment blunders through additional contributions and market rebounds. Retirees lack this safety net. A poor decision at age 65 compounds over 20 or 30 years with no paycheck to cushion the blow.
Kiplinger identifies seven behaviors that hurt retirees most. The list includes neglecting to rebalance portfolios, concentrating wealth in single stocks, and ignoring sequence-of-returns risk, which describes how market timing affects withdrawals. Retirees who sell stocks during downturns lock in losses precisely when they cannot afford to.
The encouraging news: changing course remains possible. Retirees can audit their portfolios today, adjust asset allocation, and implement tax-efficient withdrawal strategies. Small adjustments now prevent major regrets later. Financial discipline in the retirement years pays dividends, literally.