Managing Savings, Homeownership During First Retirement Year

Financial advisors warn that the first year of retirement often determines how long savings will last and whether homeowners can comfortably stay in their homes, according to reporting by Kiplinger.

“The first year of retirement is one of the most defining periods in a person’s financial life,” said Renee Collins, founder of Retire Ready Inc., told the outlet. “It’s not just about leaving work — it’s about creating a new identity and relationship with money.”

Advisers warn that retirees frequently spend too freely in their “go-go years,” when travel and leisure costs peak. The latest Consumer Expenditure Survey from the Bureau of Labor Statistics (BLS) found that average annual spending for adults ages 65 to 74 was $65,149, dropping nearly 20% by age 75.

As a result, overspending early can strain savings meant to last decades, while excessive caution can lead to missing out on achievable goals.

Scott Van Den Berg, president of Century Management, told Kiplinger that he advises new retirees to pause before making large financial moves such as gifting money, buying property or drawing heavily from investments. “Give yourself six to 12 months to adjust before locking in big decisions,” he said.

Experts recommend maintaining 12–18 months of cash or liquid reserves to avoid selling investments during downturns and to protect long-term assets like home equity. For homeowners, considering reverse mortgages or home-equity lines can provide flexibility without forcing sales during volatile markets.

Experts also recommend crafting a sustainable withdrawal plan that mimics a paycheck and helps retirees, especially newer retirees accustomed to working life, manage taxes, spending and market risks.