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8 Critical IRA Mistakes People Make in Their 60s That Could Cost Them

Many retirees may overlook these IRA missteps, and each one can quietly shrink your long-term financial security.

By Adam Palasciano

Edited by Calista Headrick

Updated Dec. 3, 2025

When you reach your 60s, your IRA becomes one of the most important tools in your retirement plan. Yet this is also the decade when costly mistakes become harder to reverse. Decisions about withdrawals, contributions, taxes, and timing can have outsized effects on your long-term financial health. If you want to start investing or better protect what you've already built, understanding these pitfalls is essential.

Here are some common IRA mistakes people make in their 60s and how to avoid them.

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Not making IRA catch-up contributions

Once you turn 50, the IRS allows you to make catch-up contributions that can help build your retirement savings faster. For 2025, the annual IRA limit is $7,000, and adults 50 and older may contribute an additional $1,000, for a total of $8,000. For 2026, the annual IRA limit is $7,500, and adults 50 and older may contribute an additional $1,100, for a total of $8,600.

Taking advantage of this extra space is especially important in your 60s, when you may have higher earnings and fewer expenses. Missing these contributions leaves valuable tax-advantaged room on the table.

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Taking out money too early

Withdrawals from an IRA before age 59½ generally trigger a 10% early withdrawal penalty, in addition to ordinary income taxes on traditional IRA funds. Even if you are laid off or face unexpected expenses, tapping your IRA prematurely can erode your long-term balance.

Early withdrawals interrupt compounding at a time when every year of growth matters. Before pulling funds, evaluate whether other resources can fill the gap without derailing your retirement timeline.

Not taking required minimum distributions (traditional IRA only)

Traditional IRA owners generally must begin required minimum distributions (RMDs) at age 73. Your first RMD is due by April 1 of the year after you reach that age, and each subsequent year's RMD must be withdrawn by December 31.

Failing to take the correct amount can lead to IRS penalties and disrupt your tax strategy. Roth IRAs, by contrast, have no RMDs for original owners, which is one reason many retirees choose to convert some funds earlier.

Withdrawing IRA funds during a market downturn

Selling investments in a down market can lock in losses and reduce the amount of capital available to rebound later. Market declines are stressful, especially in your 60s, but reacting too quickly can shrink your long-term returns.

If possible, lean on other savings or cash reserves to avoid turning temporary volatility into permanent loss. A balanced withdrawal strategy can protect your portfolio and keep your retirement income more stable.

Not timing the start of Social Security benefits with IRA withdrawals

Your IRA strategy and your Social Security claiming age should work together — not against each other. Claiming Social Security early reduces your monthly benefit permanently, which can place more pressure on your IRA withdrawals.

Conversely, delaying benefits until age 70 increases your monthly check by roughly 8% per year past full retirement age, according to the SSA. Coordinating these decisions can help protect your IRA balance and create a more sustainable income plan.

Not factoring in rising expenses

Health care, long-term care, necessary home repairs, and inflation can increase in retirement. Underestimating these expenses can lead to larger-than-expected withdrawals and faster account depletion.

Building a buffer into your IRA planning gives you breathing room for future costs. It also helps reduce the risk that major expenses derail your financial stability later in retirement.

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Not investing the funds in your IRA

Leaving too much cash uninvested in your IRA may feel safe, but it exposes your savings to inflation risk and lost growth opportunities. Over long periods, diversified investment portfolios have historically outperformed cash by a wide margin.

Keeping your IRA invested according to your risk tolerance helps maintain earning potential through your 60s and beyond. Even a conservative allocation can outperform idle cash over time.

Not setting a beneficiary

Failing to name or update beneficiaries can create administrative headaches and financial burdens for your family. Without a designated beneficiary, your IRA may be subject to probate or less favorable distribution rules.

Ensuring your spouse, partner, or children are properly listed protects your assets and honors your intentions. Revisit your beneficiary designations after major life events, including marriage, divorce, or the death of a loved one.

Bottom line

Your 60s are a pivotal decade for making smart IRA decisions that protect your savings and support a secure retirement. Whether it's avoiding early withdrawals, taking advantage of catch-up contributions, or coordinating IRA strategy with Social Security, small missteps can carry big consequences over time.

By understanding how these common mistakes affect your long-term finances, you can make choices that help you avoid unnecessary setbacks, strengthen your retirement outlook, and keep doing better financially.

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