Retirement is supposed to be a period of enjoyment and leisure, but for many seniors, it morphs into nothing but one extended era of financial stress. If you'd rather avoid that fate, be sure to steer clear of these potentially costly mistakes.

1. Depending too heavily on Social Security

Countless Americans today are woefully behind on retirement savings, with one-third of folks 55 and over having less than $10,000 in their nest eggs. And while some of this boils down to poor money management, it's also a function of our collective overreliance on Social Security.

Serious older man against a black background


Many workers believe they won't need anything more than Social Security to cover the bills in retirement, but that's just plain not true. Even if your plan is to lead a relatively modest lifestyle as a senior, Social Security will only provide about half of the income needed to achieve that goal. That's why it's critical to save as much money as you can during your working years -- to ensure that you're covered in the absence of a steady paycheck.

Now if you're already late in your career without much time to catch up on savings, you still have some options. For one thing, work longer, which will help you put just a bit more money away for the future. Not only that, but staying at your job past your Social Security full retirement age will enable you to hold off on filing for benefits, thus boosting them in the process. Furthermore, think about working part-time in retirement to bring in some additional income. This is especially crucial if you're going in with virtually no savings.

2. Dumping your stocks in retirement

Most seniors are advised to move away from stocks in retirement and shift toward safer investments, like bonds. But that doesn't mean you should completely unload your stocks, either. The reason? You need stocks to generate higher returns for your nest egg, thus enabling it to last longer.

For years, the 4% rule has been the standard for retirement plan withdrawals, and it states that if you start by withdrawing 4% of your nest egg during your first year of retirement, and adjust subsequent withdrawals to account for inflation, your nest egg should hold up for 30 years. That rule, however, assumes a relatively even mix of stocks and bonds. Get rid of the former, and you put yourself at risk of depleting your savings prematurely.

3. Not adjusting your budget

Maybe you got used to living a certain lifestyle during your working years. But if your income is substantially lower in retirement, you'll need to tweak your budget accordingly. Otherwise, you might run into financial trouble sooner than expected.

For example, if you're in the habit of dining out frequently but your retirement income doesn't support it, you'll need to either cut back or make a sacrifice elsewhere. Similarly, if having two vehicles isn't financially feasible because of your drop in earnings, you'll need to think about unloading one of them. No matter what decisions you make, don't fool yourself into thinking that the budget you followed during your working years will hold up in retirement. Chances are, it won't.

4. Underestimating the cost of healthcare

While several expenses do have the potential to go down in retirement, healthcare is the one cost that's likely to go up. That's because Medicare doesn't cover all of the essential services seniors tend to need, nor is it by any means free. Furthermore, the older we get, the more likely we are to run into health issues -- which is why it's so important to get a handle on your medical costs before plunging into retirement. Otherwise, you'll have no idea if your savings will suffice in paying the bills.

So how much might healthcare run you? The typical 65-year-old man today who lives an average lifespan will spend $189,687 on medical care in retirement. The typical 65-year-old woman, meanwhile, will spend $214,565. And in case you're wondering, the discrepancy lies in the fact that women tend to live longer. Keep in mind, however, that these numbers don't include the cost of long-term expenditures, like assisted living facilities and nursing homes. If you really want to protect yourself from the financial nightmare that is healthcare in retirement, aim to estimate your costs based on your health, boost your savings, and secure long-term care insurance when you're younger, if the option still exists.

You deserve a fulfilling retirement devoid of the financial stress so many seniors today face. Avoid these mistakes, and with any luck, that's exactly what you'll get.