It's easy to get caught up in the leisurely lifestyle retirement affords you without paying much thought to your finances. But if you don't stay money-aware during your golden years, you'll risk running into trouble and compromising the lifestyle you've learned to love. If you're retired, here are a few major mistakes you'll want to steer clear of in the coming year.

1. Not checking up on your investments

If you're sitting on a pile of retirement savings, whether in an IRA or 401(k), you probably know all too well that that money is the result of your hard work and sacrifice. And that's why the last thing you want to do is neglect your investment portfolio. If it turns out your investments aren't doing as well as you expected them to, you may need to not only make some changes, but also, adjust your retirement plan withdrawal rate to better align with the income your portfolio is generating.

Senior man and woman sitting at table with teacups in front them, both sporting serious expressions


Though you don't need to do an investment checkup every week, a quarterly look will serve you well. That said, don't confuse poor investments with periods of market volatility. If the market on a whole starts to underperform, there's a good chance your investments will follow suit, so don't be too quick to dump a specific fund or stock when there's a greater downturn at play.

2. Not budgeting for taxes

Just as you paid taxes on your income during your working years, so too must you do the same in retirement. Some seniors, however, get caught off-guard when they realize which income source of theirs are liable for taxes. For example, Social Security benefits are generally taxable to some degree if they're not your only source of income. And if you live in a state that taxes benefits, you could lose some money there, too. You'll also be liable for taxes on your retirement plan withdrawals unless your money is sitting in a Roth IRA or 401(k). And if you have a pension, that income is, in most cases, subject to taxes as well. Be sure to account for your IRS obligations to avoid overspending.

3. Forgetting about your required minimum distribution

Unless your savings are being housed in a Roth IRA, once you turn 70-1/2, you'll need to start removing a certain portion of your balance year after year to avoid IRS penalties. The reason? The IRS doesn't want you to leave your IRA or 401(k) to your heirs because the investments contained in that account benefit from favorable tax treatment. Rather, the goal is to have you slowly but surely deplete your savings balance in your lifetime.

The sum you need to withdraw annually from your retirement savings is called your required minimum distribution, or RMD, and your first one is due on April 1 following the year you turn 70 1/2. All subsequent withdrawals are then due by the end of their respective calendar years.

If you turned 70 1/2 at any point in 2019, you'll need to take your first RMD by April 1, 2020. If you don't, you'll face a 50% penalty on the amount you fail to remove, which is really just a waste of your hard-earned money.

The closer attention you pay to your finances during retirement, the less trouble you're likely to run into. Avoid these mistakes so you can keep enjoying retirement without having to deal with financial stress like so many seniors do.