4 tips to avoid common mistakes retirees make

Retirees tend to make the same money mistakes over and over and over again. Here are four common retiree errors and how to avoid them:

1. Being too conservative with money.  Treasury bonds, certificates of deposit and other savings instruments with scant yields guarantee some income, however small, and can provide soothing protection from dizzying stock market volatility. But they don't provide even a fighting chance to keep up with inflation in the long term.

Most financial planners say the safer move for the long haul is to devote a healthy portion of your portfolio to stocks.

Fix: A rough guideline for asset allocation is to own a percentage in stocks equal to 110 or 120 minus your age. In other words, a 70-year-old would have 40 or 50 percent of her investment portfolio in stocks.

2. Putting off planning. Failing to create a financial or estate plan can get you in trouble later in retirement when you may no longer be at the top of your game.

Fix: Prepare thorough financial and estate plans and discuss future aging-related scenarios with an adviser.

3. Bailing out the kids. It's possible to be too selfless and charitable in retirement if it means putting your own financial security at risk.

Some seniors contribute to down payments for their children's first homes even though they're struggling to fund their own retirements. Others stretch to pay for the college expenses of a child or grandchild. Remember: You can take out loans for college, but you can't take out a loan to pay for your retirement.

Fix: Put your financial needs in retirement first. Make sure you know how much you can safely spend from your savings each year.

4. Paying too much in taxes. Retirees usually are in lower tax brackets than in their working years. But they often fail to make adjustments that could lower their taxes.

Putting off taking withdrawals from an individual retirement account until they are required at age 70½ can be costly because such amounts are taxable and often bump retirees into a higher tax bracket. A plan of gradual withdrawals starting in your 60s can be a more effective strategy.

Seniors who do regular volunteer work tend to leave tax deductions for mileage and out-of-pocket costs on the table. And snowbirds who spend months in the Sunbelt often don't know they could save thousands of dollars by changing their legal residency to a state with a smaller or no income tax, as with Florida.

Fix: Have a plan to minimize the tax impact of withdrawals, keep receipts for volunteering costs, don't miss out on any deductions.