One Expert Warns Against Making This Costly Mistake If You’re Retiring in 2026

Retirement planning just got a digital upgrade—or a dangerous distraction, depending on who you ask. For the class of 2026, the final countdown to leaving the workforce coincides with a financial landscape being reshaped by blockchain. The old rules are being rewritten.

The New Retirement Math

Forget the 60/40 portfolio. A new generation of retirees is evaluating their nest eggs not just in dollars, but in Bitcoin and Ether. The traditional three-legged stool of Social Security, pensions, and savings is getting a fourth, volatile leg: digital asset allocation. Financial advisors are scrambling to keep up, with some embracing the trend and others warning it's a one-way ticket to working through your seventies.

Timing is Everything (And Nothing)

The 2026 retirement cohort faces a unique timing puzzle. They're hitting their peak savings years amidst unprecedented monetary experimentation and institutional crypto adoption. The mistake? Treating digital assets like a speculative side bet instead of a core, strategic allocation. Doing nothing might be the real risk, as fiat currencies face their own inflationary pressures—a gentle reminder that traditional finance has its own costly 'features'.

The Portfolio Reboot

This isn't about YOLO-ing a life savings into meme coins. It's about understanding blockchain as the infrastructure for the next decade of finance—from tokenized real estate to decentralized autonomous organizations (DAOs) offering novel income streams. Smart contracts don't just automate payments; they bypass legacy intermediaries and their fees, putting more yield directly in your pocket.

The 2026 retirement checklist just got longer. It's no longer just about healthcare and hobbies. It's about wallets, keys, and understanding a system that operates 24/7, without asking for permission. Get it right, and you retire into a new financial paradigm. Get it wrong, and you're just funding your broker's next vacation.

Key Takeaways

• Pre-retirees heavily invested in AI stocks may be taking on more risk than intended and should consider rebalancing their portfolios to maintain diversification, according to personal finance expert Jean Chatzky.
• For those concerned about a recession, keeping a few years’ worth of expenses in cash or fixed income in retirement can help you avoid selling longer-term assets during market downturns.

A lot has happened in the world of personal finance in 2025—from the passage of new tax legislation to the AI boom that has lifted the stock market to record highs. For individuals planning to retire in the coming year, the financial landscape can be challenging.

To help pre-retirees decipher what's happening, Investopedia connected with retirement expert Jean Chatzky. She has been in the personal finance space for decades, writing as a columnist for AARP and spending nearly 25 years as a financial editor at NBC.

This is an excerpt of the conversation, edited for brevity and clarity.

People should be worried unless they have been engaged in active rebalancing. When the stock market runs hot, our [target] asset allocations tend to get out of whack.

There's a lot of research on rebalancing intentions versus rebalancing in actuality. Essentially, what it shows is that a lot of people say that they rebalance [but] . . . just don't do it. In a bull market, you end up overweighted in certain categories of stocks, like AI.

Therefore, [you] are taking more risk than you intended to take.

Besides rebalancing, I think the number one thing that people should be looking at is delaying Social Security. The lever that is actually going to make a big difference in retirement is Social Security. Delaying Social Security until you get as close to 70 as possible is a really smart MOVE for the majority of people who can afford to do it [because it increases the size of your monthly benefit].

The second thing that I WOULD say to look at, if you are feeling unconfident, is your ability to keep earning. Staying in the workforce a little bit longer is incredibly powerful. When you stay in, you give your retirement assets time to grow and [you] may still be able to contribute [to retirement savings accounts].

The 4% rule becomes really problematic when you have a downturn in the first few years of your retirement. . . One of the headwinds that we're facing is that retirement is going to be a lot longer for people than they anticipate.

A couple of things for people who are heading into retirement [to bear in mind]: it's really important to move some money into cash and fixed income, with an emphasis on cash. You want to have a good couple of years of your money in cash, so if you encounter a down market in the first couple of years of retirement, you don't have to sell assets at a loss in order to fund your lifestyle.

[Also, if] you are going to follow a variation of the 4% rule during your withdrawal phase, you're going to want to take your foot off the gas a bit and not withdraw 4% during those years when the market is down.

And for those worried about volatility in the market, I like the idea of covering essential expenses with a combination of Social Security and some FORM of guaranteed protected income, like pension income or an annuity.

For a long time, there was a rule [of thumb] that you were probably going to spend 70% to 80% of your pre-retirement income in retirement.

What we're seeing in the data, is that it's just not true. The folks at Chase—they have a great trove of data on how people actually spend in retirement—the three years before retirement and the three years after, people spend more, and tend to spend more on bucket list items, like big trips but also home improvements.

The goal is to take a look at what your life costs now and [consider] how that is going to change when you enter retirement.