14 Costly Money Mistakes to Avoid in Your 60s

Once you enter your 60s, you have either retired or are inching toward that decision. If you are still working, you don’t have many years left to prepare for retirement and reach savings goals.

So, avoiding certain financial mistakes is more crucial than ever before.

If you are in your 60s, it is important to avoid the following mistakes during this decade.

Find Out: 7 must-do things before 60 for a stress-free retirement

1. Putting more than you can afford on a credit card

Credit cards are not inherently evil. Used correctly, they can provide a convenient way to make purchases and build your credit.

But if you don’t pay off the full balance before each billing cycle, debt can spiral out of hand. Once you have retired, you won’t have extra cash to waste paying off interest.

So, do your future self a favor: If you owe a big balance on your credit cards, crush your debt in the years right before retirement. Always make more than the minimum payment, including paying the entire monthly balance whenever possible.

Do you owe the IRS over $10K? Ask this company to help you eliminate your late tax debt.

2. Taking on other forms of debt

It is best to avoid debt at any age, and that is particularly true as you approach or actually enter retirement.

Taking on credit card debt, a large personal loan, or a second mortgage the decade before you retire could saddle you with an ongoing additional payment you won’t be able to afford down the road.

3. Dipping into your savings too soon

In your 60s, it is important to carefully guard the money you have saved.

If you are retired, you no longer have regular job income to replenish what you spend. If you haven’t yet left your 9-to-5 job — and paycheck — behind, it is likely you will do so soon.

So, don’t spend foolishly. Also, remember that if you have money in stocks and other higher-yielding assets, spending that cash means it will no longer grow for a future time when it can help round out your retirement budget.

Don’t take the risk of spending your savings unless it’s absolutely necessary.

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4. Taking Social Security benefits too early

You can start receiving Social Security benefits as young as age 62. But for many people, filing for benefits that early is a mistake. If you take your benefits early, your monthly check will be permanently smaller.

Usually, it’s better to put off filing until at least your full retirement age, and possibly all the way up to age 70. If you are unsure when you should file, talk to a financial advisor or another professional who can offer guidance.

5. Spending too much on your kids

We all want to give our kids help when they need it. But offering your adult children a financial boost this close to your own retirement is risky. This is a time when you should focus on yourself.

If that feels selfish, think of it as saving your children money in the future: If you can build a solid retirement savings account now, you won’t have to risk relying on your kids for money later.

6. Overindulging your grandkids

The urge to spoil grandkids might be even stronger than the desire to help your adult kids. Again, you need to prioritize your own financial future.

Remember, the money you tuck away now could go toward your grandchildren’s future inheritance, which will have a much greater impact than writing them a check today.

7. Failing to get on the same financial page as your partner

Hopefully, you and your partner have talked in depth about your retirement plans long before you turned 60.

If you never got around to it, take the time to get on the same page about your savings so neither of you is shocked by the state of your finances when retirement rolls around.

8. Forgetting to sign up for Medicare on time

Most Americans are eligible for Medicare on their 65th birthday. Make sure to sign up in time: Otherwise, you risk paying a lifelong late-enrollment fee.

You will pay this cost alongside your monthly premium the entire time you are on Medicare. The penalty never goes away, so make sure to avoid it.

It’s important to note that you may have the option of waiting to sign up for Medicare if you have group health insurance through an employer.

9. Not updating your investment portfolio

When you were young, you were likely a bigger risk-taker than you are in your 60s. That is as true of your investing style as it is of your willingness to go skydiving.

As you age, you likely will want to dial back on the amount of risk you take with investments. Ideally, you have reviewed your investment portfolio every few years to make sure the risk level reflects your age.

If you haven’t, start now. This is another situation where talking to a financial advisor can be helpful.

10. Failing to factor in rising health care costs

Don’t make the mistake of thinking you can keep health care costs low as you age. Statistically speaking, the older you get, the more money you likely will spend on health care.

Medicare does not cover all costs associated with your health care, so factor medical costs into your retirement budget.

11. Not meeting with a financial advisor

Some people prefer the DIY approach to investing. But for many others, saving enough money for retirement is much easier with expert assistance.

Talking to a retirement planner now can set you up for financial success as your golden years unfold.

12. Going with the flow instead of sticking to a strict financial plan

Saving a little money here and there is less likely to lead to financial success than setting a strict savings goal. A haphazard, off-the-cuff approach to saving can result in reaching retirement with a nest egg that is far too small.

Figure out which percentage of your funds you need to save to meet financial goals and stick with it.

13. Assuming your retirement will look like everyone else’s

You may have heard that everyone needs to save a certain dollar amount or percentage of their income by the time they retire. However, the actual amount of money you need to retire can vary dramatically depending on your personal circumstances.

Take your individual needs into account when crafting your savings and retirement plan.

14. Forgetting about inflation

As you save, remember that inflation will inevitably eat away at the value of each dollar you save.

Forgetting to account for inflation means you might face a nasty surprise as your spending power in retirement decreases.

One way to get ahead financially and to stay there is to put some money in higher-yielding investments that offer the possibility of gains that outpace rising prices.

Bottom line

Whether you are still planning for retirement or already have reached your golden years, you must avoid the financial mistakes on this list and continue to build your savings.

Wherever you are in your savings journey, don’t give up. Perseverance pays off, especially if you steer clear of unforced errors that can undermine your goals.

Money tips that can work for everyone

No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.

Focus on paying off your debt. Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.

Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.

Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).