Most people perceive their retirement to be an exciting time wherein they can sit back and relax. The transition into the golden years of life after spending several decades working hard can be exhilarating. You will have much more time to do the things you always wanted to. Yet, the question looms as to how to best pay for expenses that are bound to arise during this phase of life.

There are many financial mistakes that people make early on in life that can put their old age in jeopardy. These mistakes can have serious complications such as a huge loss of savings that can even force a retiree to return to work. In a report published by the Federal Reserve Board, around one-third of the retired population of America has had to return back to work due to insufficient funds. They have either taken up a full-time or part-time job to generate more income.

Keeping this in mind, it is essential for people to know of financial mistakes that they must avoid pre- and post-retirement.

• Not having a tax strategy
  Different taxes apply to different retirement accounts. Thus, it is very important that any retiree knows how to strategically withdraw and maintain retirement accounts. Any negligence can cause you to pay extra taxes. Talk to a tax consultant and a financial planner who can help you calculate your taxes and will guide you on how to withdraw your money more efficiently from each retirement account.

• Not spending wisely
  Having savings set aside for retirement does not give you the leverage to splurge. Yes, it does feel nice to be able to finally buy the car of your dreams, travel to exotic destinations, get your home renovated, or finally apply for the golf membership that you have waited for all your life. But, as financial experts suggest, people in retirement should not spend more than 4% to 6% of their savings per year. While it is not wrong to treat yourself occasionally, it is equally important to remember that you now have a limited source of income.

• Making financial decisions based on opinions of family and friends
  Your family and friends often have your interests in mind but they do not always know what is best for you. Also, what works for someone else may not work for you. Your family members may not be aware of tax laws that apply or how best to invest your money in the changing market. Therefore, to avoid making some serious financial mistakes, consult an expert financial consultant who can advise you on your investments and taxes.

• Continuing to support your children well into their adulthood
  Though an emotional move, spending a fortune on your adult children is not ideal if you have limited funds yourself. You do not need to give your grown son or daughter a luxury vehicle or similar gifts unless you have sufficient funds for yourself. Remember that they can earn and replace the money spent. On the other hand, as a retiree, your money is limited and therefore a precious resource.