Skip to content

5 Financial Pitfalls of New Retirees

Let’s talk today about the 5 Financial Pitfalls of New Retirees so that you don’t fall victim to these yourself. Let’s dive into this topic to prevent these from becoming our fates.

Another R.L. Brown, a Wealth Management company article I enjoyed reading and wanted to share with you today with some significant modifications to the article by me. What are the five financial pitfalls of people who are freshly retired? Many people have a vision of living a life of luxury or at least comfort and financial freedom in retirement. Going on vacations all over the world. Indulging in expansive dinners and hobbies. Living in their dream location, maybe in Florida or overseas, to maximize their retirement income.

Many folks think or don’t think about what amount they have to really retire on when you give that final notice at that job you have been at for years. But you can make some major mistakes as a new retiree that can set you back significantly from a financial standpoint.

Let’s take a look at some of the major pitfalls of new retirees so you can do your best to avoid them.


After retiring, many people make hasty decisions in such quick succession that they often find themselves financially strapped. Before you purchase an RV to travel around the country, invest in a vacation home, or make a big move to be closer to family members, take some time to evaluate your budget.  If you’re considering such major life transitions, it’s important to stop and evaluate your decisions from a financial standpoint. Will your retirement budget realistically cover your choice and leave plenty left over on which you can live? It’s a good idea to wait at least a year after fully retiring before making any major moves. That should give you plenty of time to settle in to living with an adjusted income stream. You’ll also be able to evaluate how much is left over for extra expenditures.


Yes, it’s a good idea to be more conservative with your investments once you retire. You don’t have the same time horizon to adequately recover from losing a large chunk of money in the stock market as you could when you were younger. You should have a diversified portfolio that I think should include real estate, some big company stocks, and this isn’t the time to be invested in speculative anything, and an Index Universal Life along with a Fixed Indexed Annuity that has been maturing for a while. Speak to a licensed financial professional like me for more on the last two, and I’m happy to chat about real estate as well.


Yes, I know talking about money with your significant other is often a dreaded task. But it’s important to discuss how you’ll manage money and spend your time in retirement before your golden years are upon you. Communication is key when it comes to money and retirement. If you’re both on the same page, you’ll likely be in a happier place. If your expectations aren’t aligned, work together until you find some common goals to strive for. A financial professional can also help the two of you see eye to eye and establish some realistic goals for retirement.


Your child asks you for a significant sum of money when you’re newly retired. Take some time to evaluate the situation before making a decision. Lending money to friends and family is always a tricky situation, as there is often an issue with repayment. If you decide you do want to financially assist one or more of your children during retirement, prepare yourself to cut losses. Can you afford to lose that sum of money if your loved one never pays you back? Carefully consider your answer. It’s also important to first discuss the situation with your partner to make sure he or she agrees lending your children money is a wise decision. Did you know that if you had an Indexed Universal Life account by the way that you can lend from that account and not risk your retirement capital? It’s a super low-interest rate and if your borrower doesn’t pay you back, well, there is a solution for that as well. It’s always good to know all of your options and how you are covered in multiple scenarios such as these.


It’s great if you know exactly what you want in retirement and you’ve financially planned for your goals. But it’s also important to plan for the unexpected. What if you suddenly find yourself financially assisting a family member? A loved one may need you to help cover his or her medical bills. You could also find yourself supporting an aging parent that moves into your home. Take such situations into account when mapping out your retirement plan. As a licensed financial professional, I can share how you can set up additional security in your retirement plan to cover unexpected health issues. It happens to many people in the United States; odds are very high that you or your spouse will need to visit the hospital for something, and it’s scary to see how many people end up turning to for the help of strangers to get them out of such binds. I say this often, and people don’t plan to fail; they just fail to plan.


Let’s make sure all your ducks are in a row, that you have mapped out a future for when you want to retire and let’s do it today. The best time to have planned and invested was 20 years ago, and the second-best time is today. The worst time is when it’s too late when something has already happened, when you want to take action and realize your plan will not sustain you long term. Set up a time to meet with me to see what a retirement plan can look like for you using the calendar link here in the comments section or on my page on the Get in Touch link at the top right of the page. Let’s make sure your future is protected, and let’s plan to avoid these pitfalls as much as we possibly can. Wishing you a happy and healthy life ahead of you!

YouTube Link