Retirement should be a time of relaxation and enjoyment, not financial stress or regret. Unfortunately, many retirees find themselves facing challenges they didn’t anticipate due to common mistakes in planning.  

Mistake #1: Playing too much offense in retirement 

People tend to invest more aggressively in their 20s, 30s, and even 40s because they have a longer time horizon to recoup from a market downturn. However, in retirement, you have a shorter time horizon, so you may not be able to afford a significant loss in the market. Retirees should re-evaluate their investment plans to make sure they are not taking on risk for gains they don’t need. 

Mistake #2: Being too cheap with your money 

The second mistake is being too cheap with your money. Some retirees are too afraid to take that trip to Alaska or buy the classic car because they fear running out of money. This fear is often a result of the financial industry which wants you to keep your money invested so they can keep collecting fees. Don’t let unfounded fear keep you from enjoying your retirement. 

Mistake #3: Not having an estate plan 

Retirees often avoid creating an estate plan because no one likes to talk to attorneys. It’s like going to the doctor, no one wants to do it. However, not having an estate plan can lead to disaster for your family.  Estate plans should include a plan for how you want your money to be distributed after you die and a plan for long-term care in case you need to go to a nursing home. These two factors can destroy your retirement, if they are not planned accordingly. 

Mistake #4: Using actively managed assets in retirement 

Actively managed assets are mutual funds where a fund manager picks stocks to try to outperform the market. Actively managed funds typically underperform index funds once you factor in the fees you pay. It is recommended that retirees invest in passively managed funds, such as ETFs, which track the performance of an index with much lower fees. 

By avoiding these mistakes, you can make the most of your retirement and make those golden years as shiny as possible.