New to Retirement?
Don’t Let These Common Mistakes Derail Your Future
So, you’ve finally reached retirement—congratulations! But before you pop the champagne and splurge on a sports car or exotic vacation, take a deep breath. Retirement isn’t just a long vacation—it’s a whole new phase of life that needs a smart game plan. Here are five of the biggest pitfalls new retirees stumble into—and how you can avoid them.
1. Treating Retirement Like a Lottery Win
It’s not uncommon for new retirees—especially former business owners, farmers, or ranchers—to treat their first year or two of retirement like a free-for-all spending spree. After years of feast-or-famine finances, it can feel like you finally “made it.”
But here’s the truth: Overspending early on can wreck your long-term financial stability. What you really need is:
A spending plan that your nest egg can actually support
An investment plan that fuels that spending
A backup plan in case things go sideways
And most importantly… the discipline to follow through
Without all four, that dream retirement could turn into a nightmare.
2. Assuming Your Retirement Taxes Will Stay Low
Many retirees get lulled into a false sense of tax security early on—especially if they retire in their 50s or early 60s. You may not be collecting Social Security yet, and you’re not required to take withdrawals from your retirement accounts. That keeps your tax bill low… for now.
But fast forward a few years, and suddenly:
Social Security kicks in
Required Minimum Distributions (RMDs) start flowing
Your spouse passes, and you get hit with the widow’s penalty (yes, it’s a real thing!)
Solution? Use your early retirement years for smart tax planning—think Roth conversions, strategic withdrawals, and bracket management. Future-you will thank you.
3. Grabbing Social Security at 62 Without a Plan
It’s tempting. You’ve worked hard, and you want something back ASAP. But starting Social Security at 62 without a clear strategy can cost you tens of thousands over your lifetime.
Nearly 1 in 3 Americans start Social Security early—but many shouldn't. Why? Because when to claim depends on more than just your age. Think:
Your health and life expectancy
Your marital status
Your current and future tax situation
Your investment portfolio
Before you file, get a personalized Social Security Maximization Analysis. This is one decision you don’t want to make on a whim.
4. Keeping the Same Investment Strategy—or Overcorrecting
Here’s the misconception: “I’m retired, so I should take all my money out of stocks and play it safe.”
Here’s the reality: You might spend as long in retirement as you did working. Your money needs to keep growing.
That said, many retirees overlook something called the “sequence of returns risk.” In plain English: if the market drops early in your retirement and you're pulling income, you could do serious damage to your portfolio—even if the market rebounds later.
Good news? You can mitigate this risk with smart withdrawal strategies, asset allocation, and income planning. A good advisor can walk you through it.
5. Not Knowing What You’re Retiring To
Retiring from a job is easy. Retiring to a purpose? That’s a bit harder—and far more important.
Sure, travel and golf sound great, but what happens when the novelty wears off?
Ask yourself:
How will I use my talents and strengths in this next chapter?
How will I challenge myself mentally and physically?
How will I build new relationships and stay socially connected?
We once wrote an op-ed titled “Will You Flunk Retirement?”—and honestly, it still rings true. Retirement isn’t just about money. It’s about meaning. Check out the article and the worksheets that go with it to help guide your thinking.
Final Thoughts: Give Retirement the Respect It Deserves
There’s a saying that people spend more time planning a two-week vacation than they do planning a 20- to 40-year retirement. Don’t let that be you.
Retirement isn’t the end of the road—it’s the start of a new journey. With the right planning, you can enjoy not just a successful retirement, but a sustainably successful one.
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