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Common Post-Retirement Mistakes And How To Avoid Them

Common Post-Retirement Mistakes And How To Avoid Them

April 08, 2021

Every season of life requires a different focus. Enjoying a prosperous retirement requires putting the right habits in place during the working years, but there are important decisions to be made after you are no longer working. Here we will discuss a few of the issues we sometimes see.

Leaving Your Job Too Soon

Sometimes continuing to work for an extra couple of years can yield great benefits for several reasons. If your income is at its highest, which is often the case in the later working years, you may increase your Social Security benefits, since your benefit amount is based on your 35 highest-income years. Also, if you have a retirement plan with your employer, make sure to understand how the timing of your retirement may affect the benefits you receive.

Spending Your Nest Egg Too Quickly

Many retirees like to think most about the early years of retirement when the rewards for decades of hard work pay off. Travel, sightseeing, volunteering, and spending time with grandchildren commonly come to mind as activities to fill these years. While there is nothing wrong with enjoying the well-earned fruits of retirement, we generally encourage our clients to take a conservative approach to budgeting and deciding on major purchases in the earlier retirement years, especially because a period of adjustment is necessary.

Drawing On Income Sources In The Wrong Order

Once you have stopped collecting a salary from your employer (or stop actively working in your business), your income streams change shape. We advise our clients to plan ahead and think about the sequence in which they draw from their different retirement income sources, such as pension plans, Social Security (your benefits or your spouse’s), investment portfolios, part-time jobs, business ventures, royalties, or any other income sources available. For instance, if you delay drawing Social Security benefits until age 70 and draw on other sources first, you will increase your benefit amount. Other factors, such as capital gains tax, can also come into play with certain investments, so we need to look at the full picture.

Failing To Plan For Medical Expenses

A 2018 study found that adults over 65 years of age have filed for bankruptcy at a rate that had more than doubled in recent decades. (1) Retirees sometimes fail to fully plan for expenses during the later stages of retirement, and medical care often tops the list. Various studies have estimated healthcare costs after age 65 ranging from $169,000 to $404,253. (2) Managing healthcare expenses is not simply a matter of saving enough, but also putting in place the right mix of insurance coverage and utilizing tools such as health savings accounts (HSAs), and fully utilizing Medicare benefits.

Neglecting To Reevaluate Your Financial Plan

Throughout all stages of life, you should review your financial plan every two to three years. Your investments and risk level need to be appropriate for your stage of life. Also, your investment strategy may be influenced by the timing of when you will likely draw on your other income sources. The picture can get more complicated for married couples where both spouses worked. Also, if you have adult children, their financial situations are continually changing, and will to some degree influence the direction of your plan.

We enjoy helping our clients create the foundation necessary for a fulfilling and joyful retirement. If you would like to discuss how our firm can help you set up the right foundation and avoid these pitfalls in your retirement, call us at 818-841-1746 or email to schedule a consultation.

About Cameron

Cameron Thornton is founder, president, and CEO at CTA Wealth Advisors, a fee-only Registered Investment Advisory firm in Burbank, California. Cameron has been a financial advisor for 39 years after a career in the United States Navy and as a manager with the Lockheed California Company. Cameron graduated from the University of Southern California with a bachelor’s degree in psychology and earned an MBA from the University of La Verne. He is also a CERTIFIED FINANCIAL PLANNER™ (CFP®) practitioner. He wrote the novel What Matters with Rod Zeeb as a result of his passion for helping people secure multi-generational wealth and unity for their families. Outside of work, Cam gives of his time, talent, and treasure to Mater Dolorosa Passionist Retreat Center, where he is Chairman of their Development Task Force. Cam and his wife, Jane, are currently parishioners at St. Bede the Venerable Church in La Canada. They have a life-long history of serving in numerous areas of parish ministry since their marriage in 1978. In his free time, Cam enjoys reading, traveling, and improving his golf game with Jane. They live in Glendale, California, and have three adult children, who also reside in Southern California. In 2019, Cam and Jane were blessed to become grandparents when two grandsons were welcomed into the Thornton family and in 2021 they were blessed with a beautiful granddaughter. Learn more about Cameron by connecting with him on LinkedIn.


  1. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.
  2. All investing involves risk, including the possible loss of principal.  There is no assurance that any investment strategy will be successful.