At Alpine Hill Advisors, we believe retirement should be the most rewarding chapter in your life journey. A time of freedom—not fear. Yet, retirees can often make critical mistakes along the way that jeopardize their income and long-term security. Here are five of the more common missteps we see, as well as some potential strategies to help avoid them.
1) Withdrawing Too Much, Too Soon
We work with clients to set a safe withdrawal rate focused on preserving capital to support your desired lifestyle throughout your retirement. Depending on your situation, we can deploy an array of strategies such as fixed-dollar withdrawals, fixed percentage withdrawals or systematic withdrawals with the goal of leaving principal untouched – withdrawing only investment income such as dividends and interest.
2) Ignoring Tax Implications
One of the most effective ways to minimize taxes over your lifetime is through tax diversification – using a combination of taxable, tax-deferred (traditional IRA, 401(k)) and tax-free accounts such as a Roth IRA. We continue to suggest refraining from early withdrawals to avoid higher tax rates and penalties.
If you are facing Required Minimum Distributions (RMDs) from traditional IRAs and 401(k)s, you can minimize taxes using tools such as Roth Conversions and Qualified Charitable Distributions (QCDS). Our plan may also include strategies to optimize tax brackets by carefully planning withdrawals to avoid higher tax brackets that can result from exceeding income thresholds.
3) Underestimating Healthcare Costs
Projecting healthcare costs into your retirement plan is critical. According to Fidelity’s 2025 Retiree Health Care Cost Estimate, a 65-year-old may need $172,500 in after-tax savings to cover healthcare expenses.1 Rising Medicare premiums, prescription costs, and potential long-term care expenses can derail your budget.
Your retirement cashflow plan should include setting aside dedicated reserves for emergencies or other surprises such as rising inflation. Be sure to review insurance coverage to identify potential gaps. For those retiring before Medicare eligibility, we plan for bridge health coverage to avoid costly gaps.
4) Failing to Adjust for Inflation
Inflation silently erodes purchasing power, and can even reduce your quality of life in retirement. As prices go up, your money doesn’t go as far as it used to. Cars, vacations, even meals are more expensive. We make sure our clients are adjusting their withdrawals to offset inflation.
As part of our efforts, we work with clients to explore the inclusion of dividend growth stocks and alternative investments like real estate in portfolios. Annual plan reviews will help ensure your income grows in step with the cost of living, so your retirement lifestyle stays intact.
5) Not Being Realistic When Analyzing Costs and Expenses
Life is about making lasting memories. We want you to take that summer safari with your family, you’ve earned it. We want to incentivize you to enjoy your rewards. If you want to pay your grandkids’ college tuition, that’s great. We want to be your partner in planning for all the enjoyments that life has to offer.
Conclusion
The good news is these mistakes are avoidable with proactive, ongoing planning. At Alpine Hill Advisors, we design customized retirement income strategies that strive to adapt to markets, taxes, and life’s surprises—so you can seek an enjoyable retirement journey with confidence. If you would like to discuss your current strategy to ensure your retirement cashflow needs are being met, please feel free to reach out to me.
Thanks for reading.
Brandon
Brandon Pacilio is President of Alpine Hill Advisors, a Westport, CT Registered Investment Advisor firm. If you would like to contact the author, please e-mail him at bpacilio@alpinehilladvisors.com or call (203) 246-5592.
1 Fidelity 2025 Retiree Healthcare Cost Estimate https://newsroom.fidelity.com/pressreleases/fidelity-investments–releases-2025-retiree-health-care-cost-estimate–a-timely-reminder-for-all-gen/s/3c62e988-12e2-4dc8-afb4-f44b06c6d52e
2 Ten Big Purchases Retirees Often Regret AARP https://www.aarp.org/money/retirement/purchases-retirees-often-regret/
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The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. All investments include a risk of loss that clients should be prepared to bear. The principal risks of Alpine Hill strategies are disclosed in the publicly available Form ADV Part 2A. Although fixed income generally presents less short-term risk and volatility risk than stocks, fixed income does contain interest rate risks, the risk of issuer default, issuer credit risk, liquidity risk, and inflation risk.
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