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You're newly retired — congratulations! While you may still be savoring the fresh memory of your office retirement party — or just getting used to being in charge of your own time — you also have to learn how to manage your money in a new way. Unfortunately, that's where many rookie retirees get tripped up.

Here's how to avoid some of the most common financial mistakes of new retirees.

Not Hitting the Safety Switch

If you haven't already begun shifting the balance of your portfolio toward fewer stocks, it's time to talk to your financial advisor about making some adjustments.

When you were in the workforce, you had the advantage of time to enjoy the higher returns of stocks compared to bonds and still be able to recover from any dips in the market before you needed that money. Now that you're about to start living on your retirement income, you'll probably want to start to consider moving a portion of your retirement money to fixed income investment options.

Focusing Too Much on Your Freedom

You can't wait to get started on your retirement travel bucket list — a Mediterranean cruise, a spiritual pilgrimage to Asia or a culinary tour of western ranches. You might be eager to take up sailing or some other new and potentially expensive pastime. Before you join the yacht club, though, think about a long-term plan for your retirement leisure spending so that you don't bite off more than you can chew.

A financial advisor can also help you work out an overall plan for withdrawing money from your retirement account. Some experts recommend using up no more than four percent of your available retirement funds each year.

Lending to Your Adult Children

A Pew Research Center poll found that 61 percent of U.S. parents acknowledged giving financial assistance to their adult children.

With a healthy retirement account — plus perhaps a paid-off mortgage and a smaller household budget now that your nest is empty — you may be in a generous mood when the kids need a financial favor. But be careful about risking your own financial security to lend them money. Ask yourself if you'll be OK if, as it often happens, that "loan" turns into a gift because they don't repay it.

Focusing on the Wrong Lifestyle Changes

Unless you've accumulated a very sizeable and secure nest, be cautious about trading your existing home for a luxury beach condo, or parking your sedan in the garage and hitting the road in a new RV. Take a deep breath and do a thorough financial self-assessment before you decide to make a major life change like moving abroad or launching a post retirement-business venture.

The lifestyle change you do want to start making right away is adjusting your spending habits to fit an income that may be lower and less regular than what you had before. Now is the time to look for ways to cut back on your expenses (and don't be shy about grabbing those senior discounts) so you don't have to worry about outlasting your money.

Wise retirement spending doesn't mean depriving yourself or your family of the great experiences and memories you can create now that you have more time to enjoy them. It simply means making well-considered choices. When you take the time to create a retirement budget that covers your basic needs — money for emergencies, unexpected medical expenses and savings for the fun stuff — you'll have more financial freedom.

Disclosures

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on www.Key.com, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

Investment products offered through Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor.

Insurance products are offered through KeyCorp Insurance Agency USA, Inc. (KIA). KIS and KIA are affiliated with KeyBank National Association (KeyBank).

Investment and insurance products made available through KIS and KIA are:

NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE . NOT A DEPOSIT . NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY

KIS, KIA and KeyBank are separate entities, and when you buy or sell securities and insurance products you are doing business with KIS and/or KIA, and not KeyBank.

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