10 Reasons Retirees Should Never Ignore Their Investment Accounts

June 4, 2025

After decades of saving, investing, and preparing, retirement can feel like a finish line. You’ve made it. But here’s the truth: your investment accounts need your FULL attention (not just around tax time), maybe even more now than ever before.

Many retirees assume that once they stop working, their 401(k)s and IRAs can quietly do their job in the background. But ignoring these accounts can lead to missed opportunities, unexpected fees, tax penalties, and more risk than you bargained for. Think of it this way—retirement isn’t the end of managing your finances. It’s just a new phase that requires different decisions and a narrow focus.

Let’s talk about why staying engaged with your retirement investment accounts matters—and how it can make a real difference in your financial future.

10 Reasons Why Retirees Should Not Ignore Their Investment Accounts

Just because the working years are behind you doesn’t mean your investments can be left on autopilot. Retirement brings a new set of challenges—rising healthcare costs, medical emergencies, unexpected family issues, market volatility, tax changes, and evolving income needs. Staying engaged with your investment accounts helps you respond to those changes instead of being caught off guard by them.

Many retirees assume that once they start drawing income, the hard work is done. But the truth is, how you manage your retirement accounts during this phase can determine how long your savings last and how well they support the lifestyle you’ve planned.

That’s why staying involved—reviewing, rebalancing, and adjusting as needed—is not just a good idea. It’s essential.

Here are 10 reasons why retirees should not ignore their investment accounts.

Old Accounts May Still Be Charging High Fees
Missing RMDs (required minimum distributions) Can Lead to Big Penalties
Portfolio Drift Changes Your Risk Exposure
Rebalancing Keeps Your Retirement Strategy Aligned
Tax Rules and Strategies Continue to Evolve
Your Spending Needs Change as You Age
Social Security May Not Be Enough
Debt Can Undermine Your Withdrawals
Inflation Eats Away at Purchasing Power
Life and Family Changes Require Financial Adjustments

Let’s take a look at each of them:

1. Old Accounts May Be Draining Money Through Fees

If you’ve switched jobs over the years, you might still have a 401(k) sitting with a former employer. Or maybe your IRA hasn’t been reviewed since the day you opened it. Those accounts could be quietly draining your savings through management or administrative fees.

Even a small fee—say 1%—can have a big impact over time. According to the Department of Labor, a 1% difference in fees and expenses can reduce your account balance at retirement by 28% and if managed properly, could give you thousands more in retirement. It adds up, especially over 20 or 30 years.

Consider an individual with a 401(k) account balance of $25,000 and 35 years until retirement. Assuming an average annual return of 7%:

With 0.5% in fees: The account would grow to approximately $227,000 at retirement.
With 1.5% in fees: The account would grow to only about $163,000.

This 1% increase in fees results in a $64,000 difference in retirement savings .

If you haven’t checked your fee structure in a while, now’s the time. Consolidating old accounts or moving to lower-cost options could keep more of your money where it belongs: in your hands.

2. Missing RMDs Can Lead to Tax Penalties

Once you reach age 73, the IRS requires you to start withdrawing from your traditional IRA and 401(k). These Required Minimum Distributions (RMDs) are based on your age and account balance. Ignore them at your peril, you could be hit with a penalty—25% of the amount you were supposed to withdraw.

If you do not withdraw the required amount by the due date, the IRS imposes an excise tax of 25% on the amount not withdrawn. However, if the shortfall is corrected within two years, the penalty may be reduced to 10%. For instance, if your RMD for the year is $10,000 and you fail to withdraw it, you could face a penalty of $2,500. If corrected within two years, this penalty might be reduced to $1,000.

It’s crucial to note that each retirement account has its own RMD requirements. While you can aggregate RMDs for multiple IRAs and withdraw the total from one or more of them, RMDs from 401(k) plans must be calculated and withdrawn separately from each account.

Neglecting to take RMDs not only results in penalties but also affects your retirement income strategy. Regularly reviewing your accounts and setting up automatic distributions can help ensure compliance and preserve your retirement savings.

Some retirees plan their withdrawals carefully. Others let things slide. The difference? One group keeps more of their savings. The other ends up paying the IRS more than they need to.

3. Market Conditions Change—and So Should Your Strategy

The market isn’t the same place it was when you retired. Inflation, interest rates, social and political environment and stock performance can all shift dramatically. If your portfolio hasn’t changed with it, you may be taking on more risk than you realize.

Let’s say you retired with a 60/40 mix of stocks and bonds. After years of market growth, your account may have drifted to 75/25. That’s a much riskier setup��and if a downturn hits, the impact on your portfolio could be bigger than expected.

Checking in regularly allows you to adjust your holdings based on what the market is doing now—not what it was doing five years ago.

4. Rebalancing Helps You Stay on Track

Rebalancing isn’t just for active investors. It’s a smart move for retirees, too.

Over time, certain investments may grow faster than others, causing your portfolio to drift from its original allocation. For instance, you might have started retirement with an even split between stocks and bonds. However, after a few years, your stock portion could have increased significantly, especially during strong market runs. Without realizing it, you may now be holding more risk than you’re comfortable with.

Rebalancing is how you bring things back in line. It’s akin to routine maintenance for your car—you don’t wait for a breakdown to check the engine. Retirees who rebalance periodically often feel more confident about the stability of their income and the predictability of their withdrawals.

It doesn’t mean making drastic changes. Sometimes, it’s as simple as shifting a few percentage points between accounts. But it can help your portfolio last longer and reduce stress when markets turn.

Michael Landsberg, Chief Investment Officer at Landsberg Bennett Private Wealth Management, emphasized the importance of rebalancing during his appearance on Schwab Network. He noted that many investors are heavily concentrated in a handful of large technology stocks after strong gains over the past two years. While those stocks had an impressive run, Landsberg warned that staying overweight in them without adjusting creates unnecessary risk. He advised investors to actively rebalance, noting that defensive sectors like insurance and utilities have been holding up better during recent periods of market volatility.

By trimming strong performers after significant growth, rather than chasing them further, you can lower risk across your portfolio. It’s not about abandoning winners but about keeping their influence in the portfolio under control. This disciplined rebalancing strategy can help smooth out the ride and keep your investments aligned with your original plan—not with market fads or fear-driven reactions.

Rebalancing also serves as a built-in way to “buy low and sell high” without trying to time the market, which few manage successfully over the long run. Instead of guessing when to jump in or out, rebalancing uses portfolio structure to quietly guide your decisions.

5. Taxes Don’t Stop at Retirement

Many retirees are surprised to find that taxes continue to play a big role in their financial life—even without a paycheck.

Withdrawals from traditional IRAs and 401(k)s are still taxed as ordinary income. And if you take too much in a single year, it could bump you into a higher tax bracket, raise your Medicare premiums, or even trigger taxes on your Social Security benefits.

Let’s say you’re a single retiree with a modest income. You plan to take $40,000 from your traditional IRA this year. But then you decide to withdraw an additional $30,000 to cover a large home repair.

That extra $30,000 could:

Bump you into a higher federal tax bracket
Increase the taxable portion of your Social Security benefits
Push your adjusted gross income (AGI) high enough to trigger a higher Medicare Part B premium

It’s not just about what you take out—it’s when and how you take it.

How to Be More Strategic

Here’s the good news: retirees who stay engaged with their investment accounts often find ways to reduce the long-term tax burden.

Early Withdrawals Before RMDs: If you retire before age 73, you might have a window of lower income years. Taking moderate withdrawals during this time could allow you to draw income at a lower marginal tax rate. It also reduces the size of your accounts, which means smaller RMDs later on.
Roth IRA Conversions: Some retirees convert portions of their traditional IRA to a Roth IRA over several years. You pay taxes on the converted amount now, but future qualified withdrawals are tax-free. This strategy can be especially helpful if you’re in a lower tax bracket today than you expect to be in the future.

Example: A married couple filing jointly with $80,000 in total income might convert $20,000 from a traditional IRA to a Roth while staying within the 12% federal tax bracket. That $20,000 then grows tax-free and won’t be subject to RMDs later on.
Tax-Efficient Withdrawal Sequencing: Retirees often benefit from pulling income from taxable accounts first (like brokerage accounts), then from tax-deferred accounts (IRAs, 401(k)s), and finally from Roth IRAs. This sequencing helps reduce total taxes over a retirement lifespan.

The Bottom Line

Staying on top of your tax situation in retirement isn’t just about saving money—it’s about keeping your financial plan intact. When you ignore your accounts, you miss opportunities to manage tax exposure year by year. And over time, that can lead to paying more than necessary—shrinking the very savings you spent decades building.

Being proactive with taxes doesn’t mean doing everything at once. It means checking in regularly, asking questions, and adjusting when it makes sense. Your future self will thank you.

6. Your Income Needs Will Change Over Time

Retirement isn’t a single chapter—it’s more like a series of phases, each with its own financial rhythm. What you spend in your early 60s often looks very different from your spending patterns in your late 70s or 80s. That’s why your investment strategy can’t afford to stand still.

Early in retirement, many people focus on experiences—travel, hobbies, family events, or long-postponed home projects. These years often involve higher discretionary spending and a desire for flexibility. It’s common for retirees in this phase to rely more on growth-oriented investments to keep their portfolio working for them while covering the extra expenses.

But as time passes, the focus tends to shift from enjoyment to stability and healthcare. By your mid-70s or 80s, medical bills, prescriptions, and possibly long-term care begin to take center stage. At that point, consistent income and liquidity become more important than growth.

Shifting Income Needs by Phase

Phase 1 – Age 62 to 70: Tom and Linda retire at 64 with plans to travel the country in an RV. Their annual spending in the early years hovers around $85,000, funded by Social Security, a modest pension, and targeted withdrawals from their IRA. They keep a moderate-risk portfolio to support long-term growth.
Phase 2 – Age 71 to 80: Travel slows down, but healthcare expenses increase. Tom has knee surgery, and they hire part-time help for home care. Their spending shifts to around $75,000, but more of it goes to medical-related costs. They begin reallocating some of their stocks to bonds and cash to make distributions more predictable.
Phase 3 – Age 81+: Linda lives alone after Tom passes away. Her spending decreases overall, but long-term care becomes a major consideration. She adjusts her portfolio again, reducing market exposure and drawing more from liquid assets.

This kind of progression is common. Yet many retirees keep the same portfolio they had when they first stopped working—without realizing it no longer matches their current lifestyle.

Healthcare: The Silent Budget Shifter

Healthcare costs alone are a compelling reason to revisit your plan. Fidelity estimates that a 65-year-old couple retiring today may need close to $300,000 (after tax) just to cover medical expenses throughout retirement. That doesn’t include long-term care or unexpected health events.

Failing to prepare for these costs could mean dipping into assets you didn’t plan to touch or reducing spending in other areas just to keep up.

Why It Matters

When your income needs shift, your portfolio should evolve, too. That might mean:

Allocating more to dividend-paying stocks or bond ladders for steady cash flow
Setting aside a portion of your portfolio in cash or short-term instruments for near-term needs
Adjusting withdrawal strategies to protect against selling investments at a loss during downturns

Checking in once a year—or whenever there’s a major life change—helps ensure your investments still match your real-world needs. Retirement may not come with a set schedule, but your plan should be flexible enough to keep up.

7. Social Security May Not Be Enough

Social Security plays a central role in many retirement plans—but depending on it as the main source of income can leave gaps that are difficult to fill. It was never designed to cover all expenses in retirement. It’s a foundational benefit, not a complete solution.

In 2024, the average monthly Social Security benefit sits around $1,900. That adds up to roughly $22,800 per year—a helpful amount, but one that may fall short when you factor in real-world costs like housing, healthcare, food, utilities, and transportation.

According to the Bureau of Labor Statistics, the average retiree household spends more than $52,000 annually. That means Social Security might cover less than half of what many retirees actually need to maintain their lifestyle.

What Happens If Benefits Are Reduced?

The outlook adds another layer of concern. Based on current projections, the Social Security trust fund is expected to face a shortfall by 2033. If no changes are made, benefits may be reduced by up to 20%. For someone currently receiving $1,900 a month, that would mean a cut to around $1,520. That $380 per month difference adds up to more than $4,500 per year—enough to disrupt a tight budget or force tough spending decisions.

Why Retirement Accounts Matter More Than Ever

This is where personal retirement accounts come in. IRAs, Roth IRAs, and 401(k)s aren’t just savings vehicles—they’re income sources you can shape around your goals. They give you the power to:

Withdraw more during higher-spending years (like early retirement travel)
Adjust for inflation or unexpected medical costs
Reduce taxable income strategically by managing how and when you pull funds

For example, having both traditional and Roth retirement accounts allows for more flexible tax planning. If Social Security benefits are reduced, you can rely more heavily on these accounts without making drastic lifestyle changes. Roth withdrawals, in particular, don’t count as taxable income—so they won’t bump you into a higher tax bracket or affect Medicare premiums.

The Key Is Control

Unlike Social Security, investment accounts are directly within your control. You decide the allocation. You decide when and how much to withdraw. And you can build a buffer that helps protect against future uncertainty.

Regularly reviewing your accounts helps ensure that if benefits change—or simply fall short—you have a plan in place to fill the gap. Relying on Social Security alone might leave too much to chance. Supplementing it with a thoughtful investment strategy puts the odds back in your favor.

8. Debt Can Undermine Your Withdrawals

Retirement is supposed to bring freedom—from the alarm clock, from the daily grind, and ideally, from debt. But for many retirees today, debt still lingers—and in some cases, it’s growing.

According to the Federal Reserve, debt among Americans over 65 has risen sharply in the past decade. From credit cards and personal loans to medical bills and mortgages, many retirees are entering this phase of life still carrying significant financial obligations.

And here’s the issue: debt doesn’t just create emotional stress. It can directly impact the health of your retirement portfolio.

How Debt Affects Withdrawals

Let’s say you’re managing $60,000 in annual retirement spending. If $15,000 of that goes toward loan payments, that leaves only $45,000 for your living expenses. To cover that gap, you might feel forced to withdraw more than planned from your 401(k) or IRA.

But the moment you start pulling more than anticipated, a few things happen:

You reduce your portfolio’s long-term sustainability—meaning your money may not last as long as you do.
You might trigger higher income taxes, especially if the withdrawals push you into the next tax bracket.
You could increase your Medicare Part B premiums, due to a higher modified adjusted gross income (MAGI).

In other words, debt can turn into a domino effect.

Real-World Example: The Impact of Carrying Debt

Imagine a retiree with $500,000 in a traditional IRA who plans to withdraw 4% annually—or $20,000—to supplement Social Security.
Now add $12,000 in annual debt payments. To meet total expenses, withdrawals would need to increase to $32,000—more than 6% of the portfolio. That’s well above most sustainable withdrawal rate guidelines and could significantly shorten the lifespan of the account.
At the same time, the higher withdrawal amount could push income over the threshold for Medicare’s income-related adjustments, triggering higher Part B premiums. And if that income increase leads to taxation of Social Security benefits, the retiree ends up paying even more than expected.

How to Minimize the Impact of Debt

The good news is, this situation isn’t hopeless—especially if you keep your accounts and strategy up to date:

Revisit your withdrawal plan regularly to make sure it reflects current debt obligations.
Consider paying off high-interest debts first, even if it means temporarily adjusting spending or investment contributions.
Delay large purchases, such as home remodels or new vehicles, until your financial picture allows for it comfortably.
Reallocate a portion of your portfolio to more liquid assets, if you need short-term cash without tapping into long-term investments.

Bottom Line

Debt doesn’t have to derail your retirement—but ignoring it can. By staying proactive and adjusting your investment and withdrawal strategy as needed, you keep control over your financial future. In retirement, flexibility is your ally. And that includes knowing when to pay down debt—and how to avoid letting it dictate the pace of your life.

9. Inflation Eats Away at Purchasing Power

Inflation doesn’t always make headlines, but it never stops working in the background—and over time, it quietly chips away at the value of your money. For retirees living on fixed incomes or carefully planned withdrawal strategies, that erosion can become a serious challenge.

Even modest inflation has a major impact over a long retirement. If inflation averages just 3% per year, what costs $100 today could cost nearly $180 in 20 years. Over a 25- to 30-year retirement, those numbers continue to grow, and the impact compounds. That cup of coffee, prescription refill, or utility bill could all cost far more than anticipated when you first retired.

The Slow Creep of Inflation

Imagine you’ve built a retirement plan that supports $60,000 in annual expenses today. If inflation averages 3%, you would need over $80,000 in 10 years—and more than $120,000 in 25 years—to maintain the same standard of living. Without growth in your investment accounts, you’d have to withdraw increasingly larger amounts just to keep pace, risking faster depletion of your savings.

That’s why inflation is often called the “silent threat” to retirement.

Why Investment Strategy Matters

If your retirement portfolio is heavily weighted toward cash or low-yield bonds, you might feel safe in the short term, but over the long term, you risk losing buying power. Those accounts may not grow enough to cover future costs, especially when combined with rising healthcare expenses and longer life expectancy.

On the other hand, a well-balanced portfolio that includes growth-oriented assets like stocks, equity funds, or dividend-paying investments can help your money stay ahead of inflation. While these assets do carry market risk, they also offer the potential for returns that outpace inflation over time.

Inflation-Responsive Strategies to Consider

Keep a portion of your portfolio in equities, even in retirement. Many retirees use a “bucket strategy,” where one bucket holds cash for near-term expenses, and others hold longer-term growth investments.
Review your withdrawals annually to ensure you’re adjusting for rising costs and not pulling more than necessary during market dips.
Consider Treasury Inflation-Protected Securities (TIPS) or dividend-growth funds as part of a diversified approach.

The Bottom Line

Inflation might not feel urgent year to year, but over decades, it can make a big difference. Regularly reviewing your investment accounts gives you the chance to course-correct. The goal isn’t to chase returns—but to make sure your savings keep up with the real cost of living.

A retirement plan that doesn’t account for inflation is one that may come up short when it matters most. With the right balance and periodic adjustments, your investments can continue working just as hard as you did to earn them.

10. Life and Family Changes Require Financial Adjustments

Retirement might mark the end of your career, but it’s far from the end of change. Life keeps moving—bringing with it milestones, challenges, and transitions that can all affect your financial outlook. That’s why your investment strategy can’t be a one-and-done decision. It needs to move with you.

From personal loss to newfound responsibilities or windfalls, your financial picture in retirement is shaped not just by the market, but by your life.

How Life Events Can Reshape Your Plan

Losing a spouse often brings more than emotional loss. It can mean a shift from dual income to single income, reduced Social Security benefits, or the need to rework your withdrawal strategy to match a new reality. It may also prompt updates to your estate plan, life insurance, or the way your accounts are titled.
Becoming a caregiver—whether for an aging parent, a spouse, or even a grandchild—can result in increased expenses and a drop in available time or energy to manage finances actively. You might reduce travel or lifestyle spending, but caregiving costs can pile up quickly, especially if they include home care, equipment, or unpaid time away from part-time work.
Inheriting money or property might seem like a windfall, but it also introduces new decisions. Should you invest it, use it for income, or reserve it for long-term care planning? And depending on the type of asset inherited, there may be capital gains or income tax implications—especially with inherited retirement accounts after changes under the SECURE Act.
Celebratory milestones—like the birth of a grandchild or a child’s wedding—can bring joy and financial decisions. You may want to help with college savings, contribute to a wedding, or provide occasional gifts. These are meaningful goals, but they require intention and planning, especially if your income is fixed.

Adjusting After a Major Life Change

Imagine a retiree who receives an unexpected inheritance of $200,000 from a sibling. At first glance, the natural instinct might be to spend or invest the money quickly. But depending on their tax bracket and the type of accounts involved, they could owe a significant portion in taxes if they withdraw it all at once. With a few thoughtful adjustments—like spreading withdrawals over multiple years, or using part of the funds to delay Social Security—they can extend the benefit of that inheritance far longer and with less tax impact.

Keep the Plan Moving With You

Life changes are inevitable. The key is to ensure that your retirement plan stays current. After any major event, it’s worth asking:

Does my withdrawal rate still make sense?
Should I update beneficiaries on my IRA, 401(k), or insurance policies?
Has my investment time horizon changed?
Are my healthcare or estate planning needs different now?

By revisiting your investment accounts regularly—and especially after major life events—you help ensure your financial strategy continues to match your reality, not a version of life that no longer fits. Flexibility isn’t just helpful in retirement. It’s essential.

How Often Should You Revisit Your Retirement Plan

Planning for retirement doesn’t stop once the paychecks do. Just like your lifestyle and priorities shift in retirement, your financial plan should, too.

There’s no strict rule for how often to review your retirement plan—but certain life events, market changes, or shifts in income call for a closer look. Retirement is a moving target, and staying on top of your plan helps keep your investments, withdrawals, and long-term goals in sync.

According to a CNBC and SurveyMonkey poll, 53% of Americans say they feel behind on retirement savings. Many are juggling current expenses, debt, or caregiving responsibilities while also trying to preserve their retirement income. If you’re in that group—or want to avoid falling into it—periodic reviews of your plan are a smart habit.

Some retirees rely heavily on Social Security, but with future benefits potentially being reduced by 2033, it’s risky to depend on that alone. Others might carry debt into retirement or didn’t have access to a retirement plan while working. All of this makes it even more important to check in regularly.

Want to know what else to watch for? Read more: How Often Should You Revisit Your Retirement Plan

When to Consider Working with a Fiduciary Financial Advisor

Retirement brings a series of decisions—how much to withdraw, when to adjust your portfolio, how to manage taxes, and how to adapt to life changes. While many retirees handle these choices on their own, there are times when a second opinion can make a difference.

A fiduciary financial advisor is required to act in your interest. That means they’re not there to push products or steer you toward something that benefits them more than it benefits you. Their job is to understand your goals and help you build a strategy that fits your specific situation.

You might consider working with one if:

You’re unsure how to manage Required Minimum Distributions across multiple accounts
Your tax situation has become more complex due to income changes, Roth conversions, or inheritance
You’re adjusting to a major life event—like widowhood, caregiving, or selling a home
You have multiple retirement income sources and need a coordinated withdrawal strategy

For some, working with a fiduciary becomes part of their long-term retirement planning. For others, it’s a short-term relationship to review the current plan and make targeted adjustments.

Either way, the goal is the same: to make informed decisions that reflect your current needs, your long-term goals, and the life you’re living today.

Retirement Planning Doesn’t End at Retirement

The idea that retirement means you can finally set your finances on autopilot sounds appealing—but it doesn’t hold up in real life. Markets change. Life changes. And what worked for your investment accounts five years ago may not be the right approach today.

Throughout this article, we’ve covered ten reasons why retirees should not ignore their investment accounts. Each one points to a common truth: retirement is an active process, not a static finish line. Whether it’s rebalancing to stay aligned with your goals, adjusting to inflation, handling unexpected debt, or responding to shifts in family dynamics, staying involved with your investment strategy can help you stretch your savings and stay ahead of challenges.

Even the most carefully laid plans benefit from a second look. A simple review once a year—or after any major change—can uncover new opportunities or catch issues before they become costly. It’s not about overcomplicating things. It’s about staying aware and making small adjustments that support your life as it unfolds.

Retirement is your time. Staying engaged with your accounts gives you more freedom to use it on your terms.