By Craig Childress, CFP®

Like a lot of things in life, retirement can sneak up on you and be there before you know it. As we look forward to retirement, we may envision a life of relaxation, but if you are not adequately prepared, it may cause undue stress instead. Here are four common mistakes to avoid making during the working years.

1. Not Having A Clear Spending Plan

Most pre-retirees put a lot of focus on accumulating assets and selecting the proper investments. While those are essential topics to cover, they often miss a key component: Having a clear spending plan during retirement. Before you retire, you should work through your cash flow and determine how much you’d like to spend in retirement. 

Some key questions include:

  • How much will you need to spend to keep the lights on and food on the table?
  • What will you spend on fun and hobbies?
  • Would you like to travel more, and how much will it cost?

Once you have an approximate budget of your spending needs in retirement, then you can work with a financial advisor to see if your investments, social security, pension and other income will be able to meet your needs. 

While most retirees spend less money in retirement than while they were working, other prefer to spend more. As long as the numbers make sense, either option is fine. But you won’t be able to determine that until you have a clear idea of what you’d like to spend in retirement.

2. Using Retirement Funds to Pay for College

This is a common mistake that pre-retirees make early on, thinking that they will be able to make up for the money taken out of their retirement accounts to pay for their children’s college costs. While it is a great goal to want to pay for your children’s college education, you have to weigh the consequences of what it could do to your retirement. 

If you deplete a good chunk of your retirement funds early on, you are just setting yourself up for a different type of financial strain that cannot be financed. Remember, you can always borrow for college, but you can’t borrow for retirement. If you still want to help your kids out, walk them through the process of applying for scholarships, grants, or financial aid, and encourage them to find a part-time job while they are studying. 

3. Investing Too Aggressively at Or Near the Point of Retirement

Unless you’re planning to work part-time, you don’t earn a paycheck in retirement. Since you have to rely on the investments and savings you’ve accumulated during your working years, the last thing you want is the markets hurting your chances of a comfortable retirement. 

When you first start out accumulating your wealth, you have a long-time horizon, and most investors have the ability to be more aggressive when beginning to save for retirement. However, as you get closer to retirement, you want to adjust your investment allocations to be less aggressive. Nobody knows what the market is going to do, but we do know that as retirement approaches, you cannot afford a downturn in the market.

4. Not Having a Plan for Your Retirement Lifestyle

So much of retirement planning is based on numbers. Will you have enough money? How will the market affect my investments? But have you thought about what you want your life to look like once you cross that career finish line?  

Free time is a major perk of retirement, but when you go from working full-time to not working at all, it can be a shock to your system. Saying goodbye to your career, your colleagues, and your routines can cause anxiety and depression. But if you plan ahead to fill your time with activities that will fulfill you, you can avoid the negative emotions that can come with this life transition.  

Achieve a more fulfilling retirement by staying active, pursuing new hobbies, or volunteering, which has a multitude of health benefits—such as broadening your social network, keeping your mind engaged, and even lowering blood pressure. 

The takeaway here is to be intentional about your time in retirement. Make a list of things you want to do, places you want to go, and people you want to spend time with, and then strategically map out the details so your goals become a reality. It’s easy to lose your identity when you say goodbye to your career, but filling your time and venturing out into new territory will help you build a new identity and give you something to look forward to.

The First Step to Avoiding Mistakes

Planning for retirement is not always a simple process. It involves a lot of decisions to be made today which can have a significant impact on your future self in retirement. If you’d like to learn more about how you can get on track for your retirement, we at Oswego Wealth Advisors would love to help you out. Get started today by scheduling an introductory phone call or reaching out to us at 503-342-2249 or

About Craig 

Craig Childress is Wealth Manager and a CERTIFIED FINANCIAL PLANNER™ professional at Oswego Wealth Advisors, an independent firm in Lake Oswego, Oregon, dedicated to helping their clients remove financial uncertainty so they can focus on what matters most. With over 35 years of experience, Craig employs a personal approach to help people find solutions to their financial needs and concerns, set goals, clarify their values, and design a plan that aligns their money with their values. He does everything with purpose and intention, and cares deeply about his clients and their families, desiring to equip and empower them to work toward financial freedom and a fulfilling life. As a Fiduciary, Craig puts his clients first, always, and provides transparent guidance that makes a significant difference in their lives. When he is not serving his clients, you can find Craig involved at River West Church, serving the community here and abroad through the Lake Oswego Rotary Club, reading, gardening, or playing his guitar. He loves spending time with his family, especially his wife, Terri, and their grown children. To learn more about Craig, connect with him on LinkedIn.