Once you hit retirement, it can be tempting to sit back and enjoy the benefits of your years of hard work. For some, this can seem like a good time to turn the focus away from building more wealth.
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On the contrary, actions like stopping investing all together can seriously hurt your financial future. GOBankingRates talked to financial experts to learn about four of the worst mistakes they see retirees make that inhibit the ability to build additional wealth.
Chris Heerlein, CEO of REAP Financial, said one of the most common mistakes he sees is retirees going too conservative too quickly.
“It’s natural to want stability, but many people forget that retirement can last 25 to 30 years or longer,” he said. “Shifting entirely into fixed income or cash equivalents may feel safe, but over time it can shrink your purchasing power and limit your ability to respond to inflation, healthcare costs or changes in lifestyle.
Heerlein added that he always reminds clients that retirement isn’t the finish line for investing; it’s a new phase where smart growth still matters.
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“Another issue is focusing too much on income today and not enough on opportunity tomorrow,” Heerlein noted. “Retirees often want predictable distributions, but they overlook how reinvesting a portion of their returns or keeping exposure to long-term trends can unlock greater financial flexibility.”
Heerlein noted that some of his most successful retiree clients maintain a 20% to 30% allocation in assets tied to innovation or equity-based growth, giving them the ability to adjust, gift or reinvest later without draining principal. The goal isn’t to chase risk, he noted, but to stay in the game with the right mix.
According to Christopher Stroup, founder and president of Silicon Beach Financial, another big mistake retirees make that stops them from building more wealth is sitting on too much cash.
“Retirees often keep large sums in savings accounts ‘just in case,’ while inflation quietly erodes that value,” Stroup said. “A smarter approach balances liquidity with growth through diversified investments.”
Stroup said another mistake retirees make is underestimating taxes in retirement. He said too many retirees ignore how required minimum distributions, Social Security and investment income interact.
