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3 Actions to avoid in your first 3 years in retirement

You've worked hard and diligently saved for retirement. Now you're ready to enjoy it. Go ahead, but beware: Making the wrong moves during your first few years of retirement can have a disastrous impact in the long run.

Bruce Helmer and Peg Webb, financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings.
Bruce Helmer and Peg Webb, financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings.

You've worked hard and diligently saved for retirement. Now you're ready to enjoy it. Go ahead, but beware: Making the wrong moves during your first few years of retirement can have a disastrous impact in the long run.

We've pinpointed three actions that can be particularly harmful. Before you make any drastic moves immediately after you retire, consider the following major mistakes.

1. Investing too conservatively. Some people hit retirement age and immediately reallocate their portfolios so that a significant portion of their investments are held in "safer" instruments, like cash and bonds. While these may be less volatile than some growth instruments, such as equities, and they may deliver some return on your investment, the likelihood that returns from cash or bonds will surpass that of stocks over the long term is very small. Meager returns put you at risk of outliving your assets.

Remember that your retirement will likely last for multiple decades, and that means you'll need substantial growth to make your savings last. You're better off keeping a portion of your investments in stocks so that you can keep up with inflation and your own spending patterns.

2. Overspending. When you've spent decades of your life toiling away at the 9-5, and you suddenly have nothing but time, it's tempting to spend this newfound freedom acquiring all of the things you've wanted for so long - trips to exotic locales, a new car, maybe even a second home. But these things can zap a nest egg more quickly than you think. Before you

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make any major purchases during your first years in retirement, reflect on your values. Does purchasing this item get you closer to living your values, or is the impulse perhaps spurred by something else?

3. Neglecting your health. Some people find it easier to maintain an exercise and diet regimen when it's part of a larger routine. While it may have been a no-brainer for you to wake up early and hit the gym before heading into work, you may not find it as simple when you don't have the surrounding structure to your day. But think of it this way: You have more

time now. Go for long walks with your partner or a friend. Take up a new hobby that keeps you active, like water aerobics or gentle yoga. Even something as seemingly non-active as gardening has been shown to build muscles and reduce blood pressure. Take care of yourself during these early years, because it only gets harder to get back in shape as you get older, and health care costs can torpedo your nest egg. Invest in yourself during the early years; your mind, body and savings will thank you.

There are many ways to enjoy your first few years in retirement that don't put your hard-earned savings at risk. Keep your values in the foreground, be mindful of the fact that you likely have decades ahead of you, and you'll be in a better position to make the most of your retirement years.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing involves risk including loss of principal.

By Bruce Helmer and Peg Webb, financial advisers at Wealth Enhancement Group and co-

hosts of "Your Money" on KLKS 100.1 FM on Sunday mornings. Email Bruce and Peg at

yourmoney@wealthenhancement.com . Securities offered through LPL Financial, member

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FINRA/SIPC.

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