Retirement is supposed to be a time of freedom—freedom from work, from stress, and to enjoy the life you’ve spent decades building. But there’s one mistake many retirees make with their investments that can put all of that at risk.
And no, it’s not picking the wrong stock or missing a market trend. The biggest mistake? Letting emotions take over.
If you’ve ever felt the urge to sell when the market dips, chase a “can’t-miss” investment, or move everything to cash because the economy feels uncertain, you’re not alone. But emotional decisions like these can throw your long-term financial security off track. Here’s how to avoid the trap and keep your investments working for you.
Why Emotions and Investing Don’t Mix
Even seasoned investors can feel uneasy once they retire. Without a paycheck coming in, every market swing can feel personal. Some panic and sell too soon, worried that a downturn will wipe out their savings. Others avoid stocks altogether because they don’t want to take any risks. Then, there are those who jump on the latest investment trend, hoping for a quick win.
But here’s the thing: markets go up and they go down—it’s part of the process. Over time, the stock market has historically recovered and grown. But if you sell when things dip, you lock in losses and miss out on the rebound.
Avoiding stocks entirely isn’t the answer either. While it may seem like the safest route, keeping too much of your money in cash or low-yield bonds can make it hard to keep up with inflation.
Instead of reacting to every market move, the key is having a plan that keeps you from making short-term decisions that could impact your long-term security.
How to Keep Your Investments on Track
A strong retirement investment strategy isn’t just about protecting what you’ve built—it’s about keeping your money working for you. That starts with knowing what you need your investments to do.
For most retirees, the goal is a mix of steady income, long-term growth, and flexibility for unexpected expenses. Striking the right balance is key. Stocks help with growth, bonds provide stability, and cash ensures you have liquidity when needed. The mistake many people make is leaning too far in one direction—either taking on too much risk or avoiding it entirely.
A well-diversified portfolio helps cushion market ups and downs. When one part of the market struggles, another may perform well, helping keep your overall plan on track. It’s not about chasing the highest returns; it’s about creating stability over time.
And while it may be tempting to jump in and out of the market, trying to time it perfectly is a losing game. Research shows that missing just a handful of the market’s best-performing days can significantly reduce long-term returns. The best strategy? Stay invested, stay diversified, and focus on the bigger picture.
Making Adjustments Without Overreacting
Retirement isn’t static. Your financial needs will shift, and making adjustments along the way is normal. But those changes should be intentional, not reactions to the latest headlines.
One of the biggest mistakes retirees make is playing it too safe too soon. Moving everything into low-risk investments might feel like the right move, but over time, inflation can quietly eat away at your purchasing power. What feels “safe” now could create financial stress down the road.
Instead of avoiding risk altogether, the key is balance: protecting what you’ve built while ensuring your money continues to grow.
The Value of Professional Guidance
Navigating these decisions can feel overwhelming, but you don’t have to figure it out alone. A clear investment plan removes the guesswork and helps you make smart adjustments when needed—not just when the news cycle makes you nervous.
That’s where having an experienced advisor can make a difference. Instead of reacting emotionally, you have a strategy that keeps you focused on your long-term goals.
At Falbo Wealth Management, our comprehensive planning process is designed to help retirees create a strategy that supports their financial security—no matter what the markets are doing.
Avoiding the Big Mistake Starts Today
Retirement should be about enjoying life, not stressing over daily market moves. The best way to avoid costly investment mistakes is to have a clear, well-thought-out strategy that keeps you disciplined, focused, and confident in your financial future.
If you’re wondering whether your investment approach is set up for long-term success, let’s talk.
Schedule a complimentary consultation to review your strategy and make sure it’s designed to support your goals—without unnecessary stress.
And if you’re looking for more guidance, download Your “Second” Life: Retirement Planning Workbook to help you clarify your vision for retirement and make informed financial decisions.
Joseph F. Falbo, CFP®, AIF®, CRC® is an independent LPL financial advisor that helps grow and preserve clients’ wealth using cutting edge, customized, and comprehensive strategies. With over two decades of experience, Joe helps clients to pursue and retain the lifestyle they want in retirement. To discuss your retirement goals or any financial topic you want, schedule a 20-minute complimentary call. To learn more about Joe, please visit falbowealth.com.
The opinions expressed in this material are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security, investment, or other financial product. This material has been edited with the assistance of artificial intelligence tools.