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You might have a financial plan, some savings and a targeted age in mind for when to hang up your hat and coast into your golden years.
But many Americans don’t pay enough attention to planning their after-retirement finances — an oversight that could have serious repercussions on the quality of life they’re able to sustain in their golden years.
Here are three careless mistakes that could keep you from winning at retirement.
Inflation could put a considerable dent in your nest egg — and ignoring or overlooking its effects could be a big mistake.
If you retire today, the inflation rate you’re expected to face over the next 30 years is around 2.42%, according to a forecast by the Federal Reserve (1).
On an annual basis, these increases may not seem like much, but they can add up over time. For example, at 2.42% per year, a grocery bill of $100 today will cost you over $124 a decade from now.
Consider setting up a diversified portfolio and speaking to a financial advisor. Assets such as gold, real estate investment trusts, and inflation-protected bonds may help your portfolio beat inflation, though they’re not the right investments for everyone.
Gold has long been touted as a safe haven asset during market uncertainty.
Priority Gold is an industry leader in precious metals, offering physical delivery of gold and silver. Plus, they have an A+ rating from the Better Business Bureau and a 5-star rating from Trust Link.
If you’d like to convert an existing IRA into a gold IRA, Priority Gold offers 100% free rollover, as well as free shipping, and free storage for up to five years. Qualifying purchases will also receive up to $10,000 in free silver.
To learn more about how Priority Gold can help you reduce inflation’s impact on your nest egg, download their free 2025 gold investor bundle.
You can also adjust your spending habits, like creating (and sticking to) a budget, shopping around to lower your car insurance rates, and reducing food costs through meal planning and coupons.
If managing a budget feels overwhelming to you, apps like Rocket Money can simplify the process.
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Rocket Money tracks and categorizes your expenses, providing a clear view of your cash, credit, and investments in one place. It can even uncover forgotten subscriptions, helping you cut unnecessary costs and save potentially hundreds annually.
For a small fee, the app can also negotiate lower rates on your monthly bills, making it a valuable tool for keeping your finances on track.
There are two ways you might be paying too much tax on your retirement income — not accounting for taxes on Social Security benefits and not planning for taxes on account withdrawals.
For example, if you’re filing an income tax return jointly with your spouse, and your combined income exceeds $44,000 per year, up to 85% of your Social Security benefit can be taxed. You can use an online IRS tool to determine if your benefits are taxable.
Withdrawals from tax-advantaged accounts, such as 401(k)s and individual retirement accounts (IRAs), are taxed as ordinary income, so you’ll need to account for this in your planning and budgeting as well.
Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)
A financial planner can help you design a tax-efficient withdrawal strategy — but you’ll want to start this process long before retirement since some strategies, such as a Roth conversion, may be more tax-efficient if executed over several years.
If you choose to invest in stocks to build your retirement nest egg, you may already use a robo-advisor service.
You don’t always have to put away large sums to move toward your retirement goals. Ten dollars a week could make a difference – if you’re smart about what to do with your spare change.
When you make a purchase on your credit or debit card, Acorns automatically rounds up the price to the nearest dollar and places the excess — the coins that would wind up in your pocket if you were paying cash — into a smart investment portfolio.
Let’s say you purchase a doughnut for $2.30. Before you’re done licking the sugar off your fingers, Acorns will round the amount to $3.00 and invest the 70-cent difference for you. Look at this math: $2.50 worth of daily round-ups add up to $900 per year — and that’s before your savings earn money in the market.
It’s also important to plan for changes in your investment strategy before and after retirement.
Retirees often fall into two camps: Those whose portfolios are too aggressive, opening them up to potentially large losses, and those whose portfolios are too conservative, creating the risk that their funds won’t last as long as needed.
When you retire, you may want to move to a more conservative portfolio to protect your gains and buffer your savings from stock market swings. But you could also balance this out by holding some stocks, so your savings will continue to grow (which also protects against inflation).
You’ll want to ensure your portfolio can support your planned income stream throughout your retirement, including required minimum distributions, and that they’re as tax-efficient as possible as well.
Financial planning is more than a savings strategy. It’s important throughout your entire life — and it doesn’t stop in retirement. That’s why many people turn to a trusted financial advisor.
If you’re searching for financial advice, Advisor.com connects you with vetted fiduciary financial advisors near you. All you have to do is answer a few simple questions about your finances, and Adivsor.com matches you with a short list of certified experts to choose from.
You can then set up an introductory meeting with no obligation to hire.
At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.
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Federal Reseve Bank of St. Louis (1)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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