Making any of these common financial mistakes can prove costly in retirement

Retirement is supposed to be a period of enjoyment and leisure, but for many seniors, it morphs into nothing but one extended era of financial stress. If you'd rather avoid that fate, be sure to steer clear of these potentially costly mistakes.

1. Depending too heavily on Social Security

Countless Americans today are woefully behind on retirement savings, with one-third of folks 55 and over having less than $10,000 in their nest eggs. And while some of this boils down to poor money management, it's also a function of our collective overreliance on Social Security

Many workers believe they won't need anything more than Social Security to cover the bills in retirement, but that's just plain not true. Even if your plan is to lead a relatively modest lifestyle as a senior, Social Security will only provide about half of the income needed to achieve that goal. That's why it's critical to save as much money as you can during your working years -- to ensure that you're covered in the absence of a steady paycheck.

Now if you're already late in your career without much time to catch up on savings, you still have some options. For one thing, work longer, which will help you put just a bit more money away for the future. Not only that, but staying at your job past your Social Security full retirement age will enable you to hold off on filing for benefits, thus boosting them in the process. Furthermore, think about working part-time in retirement to bring in some additional income. This is especially crucial if you're going in with virtually no savings.

2. Dumping your stocks in retirement

Most seniors are advised to move away from stocks in retirement and shift toward safer investments, like bonds. But that doesn't mean you should completely unload your stocks, either. The reason? You need stocks to generate higher returns for your nest egg, thus enabling it to last longer.



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