These are tough times for retirees and for those planning for retirement. Nest eggs have been demolished by the economic meltdown. Job cuts have forced many people into early retirement with insufficient funds to sustain them in their golden years. While there’s not much that can be done about the past, anyone can avoid making mistakes that will make a bad situation worse. 

Retirement expert Dan Solin, author of the newly published book 'The Smartest Retirement Book You'll Ever Read,' takes a look at the ten biggest money mistakes a retiree can make. Click through our gallery to see them.

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Investors generally, and men in particular, like to think that they can handle their investment decisions. But guess what? Studies show that the average equity investor who handles his own investments has a much smaller return than the S&P 500, even less than the rate of inflation. If you rely on your own investing skill to fund your retirement, it may be time to worry.

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.Using a Market-Beating Broker

We've all heard about the so-called financial experts who say they can pick stocks or mutual funds that beat the market. If so, what accounts for their dismal investor performance? The truth is, no one can be certain what tomorrow may bring. A diversified portfolio with appropriate asset allocation is the best bet -- and that goes double for retirees. 
 

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Fleeing to safety is a natural instinct when things look bad. And it’s true that keeping all your investments in Treasury bills, bonds, or even under the mattress may preserve your assets. But there is a hidden cost -- inflation. Retirees have to not only protect themselves from the risks of the market, but protect the value of their assets as well. 
 

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.Believing All Bonds Are Safe

Stocks are the risky investment choice while bonds are safer, right? Well, no, as many investors have learned the hard way. As with any investment, the higher the offered return, the more risk you assume. Even the tried-and-true municipal bonds can be shaky as the recession pushes towns and communities toward the breaking point.
 

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Both exchange-traded funds and low-cost index funds can make attractive investment options. But guess which option is often less expensive? Which one requires a brokerage account with commissions that reduce your return? Which one automatically reinvests dividends? And which one encourages you to pick certain sectors -- the opposite of diversifying your portfolio?
 

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.Ignoring Immediate Annuities

While retirees may want to avoid variable annuities and equity-indexed annuities as poor investments, the same can not be said of immediate annuities. Annuitizing a portfolio can greatly reduce the chances that an investor will run out of money in retirement. Some fixed annuities even include inflation protection. 
 
 

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Remaining in the workforce can dramatically improve a retiree’s chances of eventually affording a comfortable retirement. It increases Social Security payments and the value of 401(k)s. It also delays depletion of retirement funds. So, working for another year or three can make a big difference, especially in these days of recession- depleted nest eggs. 
 
 

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.Not Having a Current Will

Who wants to confront his own mortality and the many issues it can bring? But those who don't create a will can cost their heirs a bundle in avoidable estate taxes. And who wants government officials making critical decisions about who inherits their property and their portfolio? Better to designate a spouse, a trusted friend, or professional fiduciary for that.
 

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Second or even third marriages can bring with them a whole host of questions about who has rights and responsibilities for what. What better way to establish clear financial obligations than with a prenuptial agreement? But retirees shouldn't try to draft a prenup on their own; only experienced legal counsel can ensure that the prenup is enforceable.
 

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Taking Social Security Too Soon

You are eligible to start receiving your Social Security benefits once you've turned 62. So why wait? The money is just waiting there. One reason: wives often outlive their husbands and become dependent on Social Security benefits to live. These benefits would have been higher had the husbands put off receiving benefits until later. 
 
 
 

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