18 Ways Retirees Waste Their Money

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happy senior destroying a dollar bill in a paper shredder
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NOT-SO-SMART SPENDING

Congratulations! After years of working and careful saving, you get to kick back and crack open that retirement nest egg. But don't get too giddy just yet. Retirees still need to avoid plenty of financial pitfalls as they transition into their golden years. And while you've certainly earned the right to spend your hard-earned money how you wish, some decisions will leave you in much better shape than others. Here are 18 choices, big and small, that you may want to avoid in order to stretch your savings.
family with grandparents opening Christmas gifts
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BUYING TOO MANY GIFTS FOR GRANDKIDS

We know, we know — you want to spoil them. But before that flashy new toy or adorable outfit just seems to jump into your cart, remember that it's not just your wallet you may save if you refrain. A little restraint can help stave off resentment from parents who may not be able to afford as much, for one, and keep materialism in tots under wraps. If you simply can't resist, try to check in with their parents before buying. Chances are they may not need another stuffed animal, and that wool sweater you want to buy may not be practical for preschool.
woman helping senior neighbor with paperwork
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SUPPORTING ADULT CHILDREN — STILL

It can be rough out there for young adults — wages have stagnated, it takes longer to save for a house, and college loans can be oppressive. But if you find yourself blindly writing a check every month, reconsider, especially if you're endangering your own financial well-being. If you must give, The Hartford recommends doing so only sporadically. That way, you're no longer helping your children fund a lifestyle that may not be able to maintain by themselves.
senior couple in library smiling
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IGNORING THE LIBRARY

With retirement comes the gift of time — time, for instance, to browse the wonders that are available through your public library. Libraries can be a huge money saver if you're paying a few bucks every time you rent a movie, or more to buy books. Also available: e-books and audio books, free Wi-Fi, and maybe even subscriptions to genealogy sites.
'Senior Discount' retail sign
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SKIPPING SENIOR DISCOUNTS

It might have been a painful moment when those AARP membership fliers first started arriving in the mail, but there's no reason to let pride get in the way of a good discount. Need discounted car rentals? Hotel rooms? Cell-phone plans? How about a cheap meal? All these things and so much more are discounted for seniors, usually anywhere from 5 to 20 percent. Be sure to browse our updated list of senior discounts for the latest deals.
senior shopping garage sale
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CHASING 'BARGAINS'

It's an easy trap to fall into: Now that you have more time, what could be more fun than hitting up the local flea market, or spending a weekend hopping around estate sales and garage sales? Bargain hunting can be fun, but if you're not careful, it can become an addiction, not to mention an expensive way to fill the hours. Warning signs you have a problem include buying things you never end up using, and passing up time with friends and family to scour more sales.
'Life Insurance' under magnifying glass
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BLINDLY PAYING FOR LIFE INSURANCE

It's drilled into us as soon as we start our careers: Getting life insurance is a smart financial move. But as you age, it's essential to remember what the purpose of life insurance really is: Ensuring that those who depend on your income can maintain their lifestyle should you pass away. If your children are grown and flown and major debts are paid off, think critically about whether a new policy makes sense — especially since life insurance gets pricier as you age.
large home with well-kept lawn
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MAINTAINING A LARGE HOME

There's a reason downsizing has become a popular financial move for seniors. Getting a smaller residence can mean big savings on insurance, taxes, utilities, and mortgage payments. While staying put can make sense in some circumstances, consider whether your large home has become more burden than blessing. Exhausting upkeep, painfully cluttered rooms, a tricky staircase — all of these can be signs that it's time to simplify. Another big bonus: Moving can give you a chance to move closer to family.
senior couple on scooter
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SPENDING BIG ON TRAVEL

You no longer have to carefully budget your vacation time, so what better time to see the world than in retirement? We agree that it's a great time to go get that passport stamped, but be sure to think about ways to keep expenses down. For instance, with a flexible schedule, it's easier to travel outside of a destination's peak tourist season — that way, prices on airfare and hotels aren't as high. Another strategy is to let budget be your guide: Paris might be too expensive, but Budapest could be within reach.
Social Security benefits application form with glasses, pen, and calculator
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TAPPING SOCIAL SECURITY EARLY

Yes, you can get your hands on those benefits as early as age 62. No, that doesn't mean you should. Unless you're truly pressed for cash, waiting until full retirement age, 66 or 67, makes more sense for most people, financial advisers say. By jumping the gun and collecting early, you'll get up to 25 percent less than your full retirement benefit. On the flip side, waiting until age 70 and letting your benefits grow even more
senior man loosing his money on slot machines
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INDULGING ALL YOUR VICES

Seniors make up the fastest-growing segment of gambling addicts, experts tell AARP. Got a pack-a-day smoking habit? You're wasting anywhere from $2,000 to $5,000 a year — not to mention doing immeasurable damage to your health. Alcohol abuse and chronic overeating are also costly in more ways than one. Bottom line: You may feel like you've earned the right to let your hair down and "live a little" in retirement, but moderation is key.
annoyed senior couple sitting in car
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DRIVING TWO VEHICLES

If you and your spouse are no longer dealing with dual commutes, consider whether you can get by with one car instead of two. Even if the car is paid off, you'll get a nice cash infusion upon selling it, and you'll save down the line on things like insurance, maintenance, and taxes. Especially if you live in a reasonably large metro area, apps like Uber and car-sharing services like Zipcar mean you aren't out of options on the odd occasions when you need two sets of wheels.
smiling senior man giving prescription to pharmacist
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NOT SWITCHING TO GENERIC MEDICATIONS

If you're skeptical that generic medication is as effective as its name-brand equivalent, don't be. Generics have to meet the same FDA-approved standards, but cost up to a whopping 85 percent less. Why the cost difference? Brand names have to sink much more money into initial research trials, advertising, and distribution, according to Harvard Health. It's worth consulting your doctor to see whether there's a generic available for any given prescription — and remember that there may even be multiple generic options.
senior woman with doctor going over tests
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GETTING UNNECESSARY TESTS AND SCREENINGS

Retirees are conditioned to expect that they'll spend more on healthcare as they age. Unfortunately, most are also conditioned not to question their doctor — even when they may be encouraged to undergo costly tests or treatments that may be unnecessary or even harmful. Check out Choosing Wisely, a campaign spearheaded by the American Board of Internal Medicine. It helps patients research what might be necessary — and what's not — so they can have a more balanced dialogue with their doctor.
senior woman giving credit card details on the phone
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GIVING TO EVERY 'CHARITY'

If it's in the budget, charitable giving is a wonderful thing — especially when it's a cause close to your heart. But be vigilant against feeling like you have to give to every cause. That's especially the case when it comes to pushy solicitors and telemarketers. Often times bogus charities target seniors in particular, knowing they can be more reluctant to say "no." Even worse, saying "yes" to one dubious organization can land you on a so-called "suckers list" that can be passed around, opening the flood gates for more solicitations.
confused old woman using smartphone at home
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IGNORING THE MONEY-SAVING POWER OF YOUR SMARTPHONE

One of the best ways to save? Shake off any technophobic tendencies and harness the power of that smartphone or tablet with money-saving apps. For instance, there are budgeting apps like Mint that let you track every penny, and investment-focused apps like Personal Capital. GasBuddy can help you track down the cheapest prices at the pump, and SnipSnap can digitize paper coupons.
Medicare application form with stethoscope and calculator
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MISSING THE MEDICARE SIGN-UP DEADLINE

Take note: Missing your window to sign up for Medicare can be a needlessly wasteful and costly mistake. Retirees who are turning 65 and have not yet tapped Social Security have a seven-month window to sign up. If you don't, you'll face a costly premium penalty of 10 percent for each 12-month period that you waited — and you'll be stuck with it as long as you have Medicare.
senior opens door for salesman
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FALLING FOR THE TIMESHARE

For many retirees, timeshares seem like a great deal, and it's easy to get lured in by the promise of a free dinner or a cheap vacation in exchange for sitting through a high-pressure sales presentation. After all, they supposedly offer all the benefits of a vacation home at a fraction of the price. But unlike a vacation home, a timeshare is not an investment: As finance author and radio show host Dave Ramsey says, "you're just pre-paying your hotel bill for the next 20 years whether or not you use it." Even worse, the nearly impossible task of selling a timeshare is even harder now with the rise of scammers.
worried senior Hispanic woman checking mailbox
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NOT HAVING A WITHDRAWAL PLAN

Finally getting to tap that retirement nest egg can be an exciting feeling, but doing it willy-nilly can leave you on the hook for big taxes if you're not careful. Fidelity recommends tapping accounts in a certain order — for instance, taking required minimum distributions from 401(k)s first in order to avoid potential tax penalties, while leaving Roth IRAs untouched as long as possible. That's because qualified withdrawals aren't taxable, and if they're passed down to an heir, they won't pay federal income tax on the distribution.

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