Retirement Retirement Planning

16 Things You Should Never Do in Retirement

These common missteps can sour your golden years.

By Chris Lewis, CEPF , Edited by Laura Hohenstein

Updated May 17, 2026

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Retirement mistakes tend to fall into two categories: financial or lifestyle. Often, they're intertwined. Mistakes can quietly build up, with damaging compound returns.

Here are 16 financial mistakes that can sour your retirement.

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Not claiming Social Security at the right time

Claiming Social Security too early can permanently reduce your monthly benefit, while delaying too long may not always pay off depending on your health and income needs. The right timing depends on your personal situation, not a rule of thumb.

For my retirement, my husband and I are taking a mixed approach. I will claim Social Security at full retirement age (FRA) while my husband holds out until age 70 for the max benefit. (Of course, this plan is directional and could change. Ask me again in a few years when I plan on dying; I may have a different answer.)

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Withdrawing from accounts in the wrong order

Taking withdrawals without a strategy can increase your tax bill and shrink your portfolio faster than necessary. Drawing from tax-deferred accounts too early or in large amounts may push you into higher tax brackets.

You need a solid drawdown plan that gets regularly revisited for tweaks and course corrections for market shifts and changing financial needs.

Carrying debt into retirement

Debt doesn't disappear when your paycheck does. High-interest balances or large monthly payments can strain a fixed income and limit flexibility. Reducing debt before retirement can help protect long-term stability.

In a similar vein, make sure you're aware that you're debt-free. Look over a copy of your credit report to see if there are old obligations you've forgotten or see what your spouse and authorized users have racked up.

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Ignoring inflation

You can't opt out of inflation — when supermarket prices spike, we all have to confront it. But you can get proactive in your planning. To stay ahead, you need some of your money growing (not all in cash) and a plan that leaves room for rising costs instead of front-loading your spending.

Underestimating health care costs

Health care is one of the most significant expenses retirees face, and many underestimate how much they'll need. Costs for premiums, prescriptions, and long-term care can quickly add up.

According to a Fidelity study, the average American can expect to pay $172,500 in out-of-pocket costs for medical care over the course of their retirement.

Not shifting to more conservative investments

Keeping an overly aggressive portfolio can expose retirees to unnecessary risk, especially during market downturns. Gradually shifting to a more balanced allocation can help preserve capital.

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Not adjusting your lifestyle after retiring

Retirement often requires changes in spending habits. Continuing to spend as if you're still earning a full salary can lead to faster depletion of savings.

Falling for scams and fraud

Retirees are often targeted by financial scams, which can result in significant losses. Staying alert and verifying financial opportunities is critical to protecting your assets.

Seniors are not necessarily more gullible or ignorant than other age groups, but they are more heavily targeted as they have more funds at stake.

Cashing out a pension too soon

Taking a lump sum instead of a steady income stream can be tempting, but it can also increase the risk of outliving your money if not managed carefully.

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Supporting adult children financially

Helping adult children may feel necessary, but it can come at the expense of your own financial security. Retirees need to prioritize their long-term needs.

Financial support doesn't always need to come in the form of cash. Other forms include letting them crash on the basement couch for a couple of months, helping them build a budget, or showing them how to get a prepaid credit card to rebuild their credit.

Being house-rich but cash-poor

Having most of your wealth tied up in your home can limit liquidity. Without sufficient cash flow, covering daily expenses and unexpected bills can become difficult. Make sure you have a cash emergency fund.

Not staying physically and socially active

Retirement isn't just financial. A lack of physical activity and social engagement can negatively affect both health and overall well-being.

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Underestimating how long retirement will last

Many people underestimate life expectancy, which can lead to running out of money later in life. Planning for a longer retirement helps ensure financial security.

Focusing only on returns instead of cash flow

Strong investment returns don't always translate into usable income. Growth stocks and tangible commodity goods are two investment types that can have strong performance but no usable income unless you sell. Retirees need to ensure they have reliable cash flow to cover ongoing expenses.

Holding too much cash for too long

On the reverse side, holding too much cash for extended periods can limit growth and reduce purchasing power due to inflation.

Not working with a financial professional

Managing retirement finances can be complex. Working with a financial advisor can help retirees avoid costly mistakes and create a more sustainable plan – not to mention the added accountability of a personal financial watchkeep.

Having a financial planner has saved me from wreaking havoc more than once. The mere specter of judgment and disapprobation is enough. (I don't want to shamefacedly explain to her why I purchased a $3,995 electric bike. Because it looked cooler than my current one. And comes with a sidecar.)

Bottom line

Retirement mistakes aren't always obvious at the moment, but they can compound over time and become difficult to reverse. The most successful retirees tend to stay engaged with their finances and adjust their plans as needed.

Retirement isn't a set-it-and-forget-it phase. It requires ongoing attention, thoughtful decisions, and a willingness to adapt as circumstances change.

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