The Key Mistakes Investors Make in Retirement
After they retire, most people completely change some of their investment habits—and risk depleting their wealth.

It's not easy being an investor when you're young, but it gets even more difficult once you transition into retirement.
The best investors are those who are able to focus on the long term and avoid reacting to the chatter of the daily news stories. This tends to be easier to do when we are younger and gainfully employed, but it becomes increasingly difficult as we age, move out of the workplace and change our investment time horizons.
As a financial adviser for more than a quarter of a century, I've counseled numerous investors who've struggled mightily during their early years of retirement. Here's why:

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
First, while we are working, we have three things going for us:
1. We have time on our side. Over the decades, the markets go through cycles that are impossible to predict. While we are working, we may dislike a downturn in prices, but it's easier not to worry too much because the money isn't needed today, and we can be reasonably confident that things will recover (just as they always have).
2. We are adding to our investments. If we are saving for retirement, we have money that is either deducted from our paychecks or our checking accounts on a regular basis that is building our nest eggs. This consistent savings adds growth even when the markets are flat.
3. We are too busy to focus on our investments. When we are working full-time, our days are occupied by all the responsibilities that our work and lives demand. We might glance at our 401(k) statement and think we should spend some time analyzing it, but our busy lives keep most of us from spending much time moving things around. (This prevents us from micro-managing our investments or falling into the behavioral finance trap of selling when markets are down or buying when they are up.)
But things change quite a bit when we leave our careers and move into retirement.
1. We believe we no longer have time on our side.
We've been saving for retirement our entire lives, and the future is now. The long time-horizon buffer that we perceived while we were younger isn't there. (At least that's how we may think about it.)
But the reality is that we still potentially have decades to go during retirement. With increasingly long lifespans, we may have 30 years (or more) that our money needs to last, so, technically, we still need to consider ourselves long-term investors.
2. We are no longer saving towards retirement.
And we are probably withdrawing from our accounts. This can be a really difficult thing to get our heads around. We've been accustomed to seeing our accounts build each year due to our added savings. Now, as we begin some sort of withdrawal schedule, we may see our accounts decline in value, which is really difficult emotionally because this steady decline is totally foreign to us.
3. We have too much time to monitor our investments.
This may sound counterintuitive, but for most of us, it's best to have a solid investment plan in place so we can ignore our investments on a daily basis—particularly if we've hired a good financial adviser. What can happen, though, is that with all of the added free time on our hands, we may overanalyze our investments and begin to focus on the wrong things. As a result, we could be tempted to make transactions in our accounts that are not only the wrong trades, but are made at the wrong times (we sell low and we buy high).
Having a clear grasp of how your approach to investing may evolve can ease a lot of the financial stress that occurs when you stop working. I detail the retirement transition process and how to prepare for these changes in my new book, Personal Decision Points: 7 Steps to Your Ideal Retirement Transition.
Your money has to last, but retirement is a time when emotional decisions can really hurt you and your finances. Make it a smooth transition (and a long, fruitful retirement) by, whenever possible, continuing to take the long-view approach to your financial future.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Scott Hanson, CFP, answers your questions on a variety of topics and also co-hosts a weekly call-in radio program. Visit HansonMcClain.com to ask a question or to hear his show. Follow him on Twitter at @scotthansoncfp.
-
Can the 'Guardrails Approach' Protect Your Retirement Investments?
This investing method helps retirees avoid running out of money, even in a highly volatile market.
By Simon Constable
-
Social Security Is Taxable, But There Are Workarounds
If you're strategic about your retirement account withdrawals, you can potentially minimize the taxes you'll pay on your Social Security benefits.
By Todd Talbot, CFP®, NSSA, CTS™
-
Social Security Is Taxable, But There Are Workarounds
If you're strategic about your retirement account withdrawals, you can potentially minimize the taxes you'll pay on your Social Security benefits.
By Todd Talbot, CFP®, NSSA, CTS™
-
Serious Medical Diagnosis? Four Financial Steps to Take
A serious medical diagnosis calls for updates of your financial, health care and estate plans as well as open conversations with those who'll fulfill your wishes.
By Thomas C. West, CLU®, ChFC®, AIF®
-
To Stay on Track for Retirement, Consider Doing This
Writing down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
By Matt Green, Investment Adviser Representative
-
How to Make Changing Interest Rates Work for Your Retirement
Higher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
By Phil Cooper
-
Within Five Years of Retirement? Five Things to Do Now
If you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
By Evan T. Beach, CFP®, AWMA®
-
The Home Stretch: Seven Essential Steps for Pre-Retirees
The decade before retirement is the home stretch in the race to quit work — but there are crucial financial decisions to make before you reach the finish line.
By Mike Dullaghan, AIF®
-
Three Options for Retirees With Concentrated Stock Positions
If a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
By Evan T. Beach, CFP®, AWMA®
-
Four Reasons It May Be Time to Shop for New Insurance
You may be unhappy with your insurance for any number of reasons, so once you've decided to shop, what is appropriate (or inappropriate) timing?
By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS