Common Retirement Investing Pitfalls (and How to Think About Avoiding Them)
Last updated 22 March 2026 · General information only
Most retirement setbacks are not caused by exotic mistakes. They come from a handful of ordinary patterns that repeat, year after year.
Reacting to a falling market
Switching to cash after a fall converts a paper loss into a real one and usually means missing the recovery. Deciding in advance what would and would not cause you to change strategy is more useful than any forecast.
Holding too much in cash for too long
The opposite error. Cash feels safe, and over one year it is. Over 25 years, inflation quietly reduces what that money buys. A long retirement usually needs some growth exposure.
Concentration in one asset
A single property, a single company, or a single sector can dominate a retirement balance. When it does well the outcome looks excellent; when it does not, there is no second engine. Diversification is boring by design.
Underestimating fees and tax
Fees are certain; returns are not. The same is true of tax treatment, which differs between super, pension phase and investments held in your own name. Both deserve as much attention as expected return.
Ignoring the means tests
A decision that improves your investment return can reduce your Age Pension, and vice versa. Looking at one in isolation can produce a worse overall result.
Acting on unsolicited contact
Cold calls, social media messages and 'exclusive' offers targeting retirees are common. Legitimate professionals do not need urgency to make their case. Verify the licence, take your time, and speak to someone you already trust before moving money.
Frequently asked questions
How much should I hold in cash?
There is no universal number. Many retirees think in terms of one to three years of planned drawdowns held defensively, but this depends entirely on your circumstances.
Is property safer than shares in retirement?
Different, not safer. Property is less liquid, harder to sell in parts, and carries its own concentration and cost risks.
Should I have a written plan?
A single page setting out your income needs, your buckets and your rules for changing course is often more useful than a long document.