The 12 Worst Ways Retirees Waste Money

Don’t spend all your retirement cash on useless things instead of expenses you may need to cover.

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Updated June 6, 2024
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You may be concerned about how you can retire comfortably while living on a fixed income. There are ways to get it right, but there are also ways to get it wrong. 

A simple step toward getting it right: avoid wasting money when you no longer have a steady income. Certain kinds of spending can lead to a precarious retirement.

So as you plan your post-work life and re-evaluate your retirement budget, here are a few spending habits that could knock your plans off track if you're not careful.

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Claiming Social Security too early

wichayada/Adobe senior old lady stressing in office in front of laptop

You can start claiming Social Security benefits when you’re 62 — but you‘ll receive less than if you wait until your full retirement age (assuming no changes to the current Social Security setup).

Delaying beyond your full retirement age (up to age 70) can further increase how much you receive from the Social Security Administration. 

The Social Security Administration has a calculator on its website that can help you compare monthly payments depending on when you elect to start receiving Social Security. 

You may also want to talk with a financial advisor about your retirement. Together, you can determine how to stretch your Social Security income.

Supporting adult children

eric/Adobe senior couple having quality time with young lady

One way seniors can stop throwing away money is by reconsidering supporting their capable adult children. 

You may think it’s a good idea to continue to help your kids, but it could come back to haunt you if you end up without the retirement money you need.

It’s a good idea to remember that you need to pay yourself before you pay for others, and that includes giving money to your grown children. 

They can earn income and have more time to clear any debts they may incur — whereas you may have only your savings and Social Security.

Spoiling family and friends with gifts

Drazen/Adobe portrait of happy family posing in front of a door holding presents outdoors

It can be fun to have a new grandchild that you want to spoil with gifts. Retirement also means more time to visit with friends. But spending excessively on toys or nights out can add up.

Instead, try to stick to a budget when it comes to spending on others, just as you do when spending on yourself. Saving a little bit here or there can add up when spending on a fixed income.

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Investing too aggressively

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Investing is an important way to save money so you can retire. But remember that you can’t throw money into an investment account like a 401(k) and then forget about it.

It’s a good idea to invest aggressively when you’re younger. That extra risk can pay off when things go well, and you have plenty of time to compensate for any losses.

But as you get closer to retirement, consider rebalancing your investments regularly to reflect a less aggressive portfolio so you can protect the assets you’ve earned.

Ignoring senior discounts

Yuliia/Adobe african american man looking at smartphone surprisingly

You may think you’re not old enough for senior discounts, but you would be surprised by the age minimum for deals at restaurants, hotels, and more. 

Use your age to your advantage and get in the habit of asking for senior discounts so you can save money for years to come.

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Holding on to life insurance

Martin Barraud/KOTO/Adobe couple sitting on a couch looking through documents

Life insurance is necessary to cover dependents and bills if something happens to you and your loved ones can no longer rely on your income. But once you’re retired, you may not have those same concerns.

You may consider dropping life insurance if your children are grown and have moved out or if you have paid off major debts.

Instead of life insurance, you may want to look at other options, like long-term care insurance, which can cover bills associated with care as you get older.

Staying in a large home

Syda Productions/Adobe senior couple laughing in garden

You may have enjoyed your home for many years, but staying in your home could be a money pit when you’re retired.

Re-evaluate your living situation, and consider downsizing or moving to an area with a lower cost of living.

Spending too much money on travel

glowonconcept/Adobe asian couple enjoying on  beach on hammock

One of your retirement goals may be to travel more, but there are affordable ways to visit new places. Overindulging on vacations or going above your budget could cost you later on.

Instead, look for economical ways to travel, such as taking advantage of a senior discount. And think about creating a budget ahead of time so you aren’t tempted to spend above and beyond what you can afford.

Owning two cars

bilanol/Adobe cars standing in driveway

You may have needed two cars when you and your spouse were working and commuting. But if you are both retired, a two-car household may be causing you to spend extra money.

A great way to reduce costs is to get rid of one car. You can not only save money on the vehicle itself, but also by not paying for insurance, gas, maintenance, and more for an additional vehicle.

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Shopping too much

oneinchpunch/Adobe happy senior ladies in street with shopping bags

One great thing about not working anymore is the extra time to shop for new clothes or accessories. But that spare time can lead to additional costs at the expense of your retirement portfolio.

It’s nice to splurge on a few items for yourself here or there, but try to keep your spending in check. You may need that money later for other fun plans or necessary expenses.

Home remodels

Halfpoint/Adobe Senior couple painting walls in home

Once you’ve retired, you have to ask yourself if the potential increase in home value is worth the money you’ll pull from your savings account to afford a new kitchen or bathroom.

Additionally, there’s no guarantee that your remodel will up your home’s value significantly. The housing market can be volatile.

Expensive hobbies

Romario Ien/Adobe senior woman wearing glasses smiling while holding money

In retirement, you can’t count on having cash to burn. If you can replace an expensive hobby with something cheaper, now is the time.

You can even focus on cutting back instead of quitting cold turkey. Instead of shopping at designer stores, you might try browsing thrift stores and finding used, eclectic, and much more affordable clothing.

Research free community events, such as family movie nights or concerts in the park. Write a list of free activities you can substitute for pricey ones, like visiting the library instead of the bookstore.

Bottom line

poco_bw/Adobe couple being affectionate

Retirement, ideally, will be a breeze. Responsible spending is part of what gets you there, so you‘re more than capable of spending properly as a retiree.

Think about how to estimate your retirement budget to determine your regular costs. Also, consider talking to a financial advisor about your investment portfolio, insurance, and taxes to set the best course for stress-free retirement (or even early retirement).

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Jenny Cohen

Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and