The Key Mistakes Investors Make in Retirement
After they retire, most people completely change some of their investment habits—and risk depleting their wealth.

It's not easy being an investor when you're young, but it gets even more difficult once you transition into retirement.
The best investors are those who are able to focus on the long term and avoid reacting to the chatter of the daily news stories. This tends to be easier to do when we are younger and gainfully employed, but it becomes increasingly difficult as we age, move out of the workplace and change our investment time horizons.
As a financial adviser for more than a quarter of a century, I've counseled numerous investors who've struggled mightily during their early years of retirement. Here's why:

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
First, while we are working, we have three things going for us:
1. We have time on our side. Over the decades, the markets go through cycles that are impossible to predict. While we are working, we may dislike a downturn in prices, but it's easier not to worry too much because the money isn't needed today, and we can be reasonably confident that things will recover (just as they always have).
2. We are adding to our investments. If we are saving for retirement, we have money that is either deducted from our paychecks or our checking accounts on a regular basis that is building our nest eggs. This consistent savings adds growth even when the markets are flat.
3. We are too busy to focus on our investments. When we are working full-time, our days are occupied by all the responsibilities that our work and lives demand. We might glance at our 401(k) statement and think we should spend some time analyzing it, but our busy lives keep most of us from spending much time moving things around. (This prevents us from micro-managing our investments or falling into the behavioral finance trap of selling when markets are down or buying when they are up.)
But things change quite a bit when we leave our careers and move into retirement.
1. We believe we no longer have time on our side.
We've been saving for retirement our entire lives, and the future is now. The long time-horizon buffer that we perceived while we were younger isn't there. (At least that's how we may think about it.)
But the reality is that we still potentially have decades to go during retirement. With increasingly long lifespans, we may have 30 years (or more) that our money needs to last, so, technically, we still need to consider ourselves long-term investors.
2. We are no longer saving towards retirement.
And we are probably withdrawing from our accounts. This can be a really difficult thing to get our heads around. We've been accustomed to seeing our accounts build each year due to our added savings. Now, as we begin some sort of withdrawal schedule, we may see our accounts decline in value, which is really difficult emotionally because this steady decline is totally foreign to us.
3. We have too much time to monitor our investments.
This may sound counterintuitive, but for most of us, it's best to have a solid investment plan in place so we can ignore our investments on a daily basis—particularly if we've hired a good financial adviser. What can happen, though, is that with all of the added free time on our hands, we may overanalyze our investments and begin to focus on the wrong things. As a result, we could be tempted to make transactions in our accounts that are not only the wrong trades, but are made at the wrong times (we sell low and we buy high).
Having a clear grasp of how your approach to investing may evolve can ease a lot of the financial stress that occurs when you stop working. I detail the retirement transition process and how to prepare for these changes in my new book, Personal Decision Points: 7 Steps to Your Ideal Retirement Transition.
Your money has to last, but retirement is a time when emotional decisions can really hurt you and your finances. Make it a smooth transition (and a long, fruitful retirement) by, whenever possible, continuing to take the long-view approach to your financial future.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Scott Hanson, CFP, answers your questions on a variety of topics and also co-hosts a weekly call-in radio program. Visit HansonMcClain.com to ask a question or to hear his show. Follow him on Twitter at @scotthansoncfp.
-
Rising AI Demand Stokes Undersea Investments
The Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
By John Miley Published
-
Return to Your Home Country to Retire: Repatriation Retirement
They came to the U.S. to live and work, but they want to retire in the old country. Here's how to juggle the move back home.
By Alina Tugend Published
-
The Three Biggest Fears Keeping Retirees Up at Night
Here are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
By Pam Krueger Published
-
What Can a Donor-Advised Fund Do for You? (A Lot)
DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
By Julia Chu Published
-
Estate Planning When You Have International Assets
Estate planning gets tricky when you have assets and/or beneficiaries outside the U.S. To avoid costly inheritance mistakes, it pays to understand the basics.
By Kelsey M. Simasko, Esq. Published
-
Three Essential Estate Planning Steps to Protect Your Nest Egg
After dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
By Nicole Farbo, CFP® Published
-
Is Chasing the American Dream Ruining Your Financial Life?
Too many people focus on visible affluence as a marker of success. Here's how to avoid succumbing to the pressure and driving yourself into debt.
By Anthony Martin Published
-
Retiring With a Pension? Four Things to Know
The road to a secure retirement is slightly more intricate for people with pensions. Here are four key issues to consider to make the most out of yours.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
How to Teach Your Kids About the Tax Facts of Life
Taxes are unavoidable, so it's important to teach children what to expect. Also, does your child need to file a tax return for 2024? Find out here.
By Neale Godfrey, Financial Literacy Expert Published
-
Revocable Living Trusts: The Good, the Bad and the Ugly
People are conditioned to believe they should avoid probate at all costs, but when compared with living trusts, probate could be a smart choice for some folks.
By Charles A. Borek, JD, MBA, CPA Published