The financial move most retirees make in their first 6 months that advisors say quietly destroys their savings by year 5 - Silicon Canals

"Picture this: you've just retired, the freedom feels incredible, and suddenly you have access to all that money you've been saving for decades. What's the first thing most retirees do? They make a financial decision that seems perfectly reasonable at the time but ends up costing them hundreds of thousands of dollars within five years. Financial advisors see it happen over and over, yet they rarely speak up about it directly."

"When I was running my own business, I learned something crucial about cash flow that most people never grasp until it's too late: liquid money is oxygen. You can have all the assets in the world, but if you can't access cash when you need it, you're suffocating financially. Retirees walk into retirement with, say, $800,000 in savings. They still owe $200,000 on their mortgage. The monthly payment feels like a burden, especially now that the regular paycheck has stopped."

Many retirees respond to newfound savings by immediately paying off their mortgage because the emotional relief feels substantial. That decision converts liquid cash into an illiquid asset and can trap $200,000 or more in a home that cannot easily fund living or medical expenses. Cash flow becomes critical in retirement because regular income ceases and unexpected costs emerge. Financial advisors frequently observe this pattern but hesitate to warn because the payoff feels so logical and emotionally satisfying. Retirement changes the calculus of debt versus liquidity, and the immediate mortgage payoff can produce large financial losses within a short timeframe.

Read at Silicon Canals