7 Surprising Ways Retirees Waste Their Savings

Senior upset about finances
shurkin_son / Shutterstock.com

Retirees usually have a limited amount of money to spend during their golden years.

Unfortunately, some people make costly mistakes that can deplete their nest egg prematurely.

From giving away cash indiscriminately to refusing to embrace lifestyle changes, here are some surprising ways retirees waste their hard-earned savings.

1. Ignoring senior discounts

Middle age hispanic woman holding shopping bags head smack regret
Aaron Amat / Shutterstock.com

It’s a mystery why anyone would pay more than needed, but retirees do just that when they ignore senior discounts.

Maybe they don’t realize how much these benefits can add up. Some retailers, for example, offer storewide discounts ranging from 5% to 20% on certain days.

We have a list of the 50 best senior discounts.

2. Buying unneeded insurance

Senior couple meeting financial adviser man woman sales
goodluz / Shutterstock.com

During a person’s working years, disability insurance can ensure someone has the cash needed to pay bills if they become sick or injured and can’t hold down a job.

However, it’s a waste of money to keep paying disability insurance premiums when you’re retired. The same goes for life insurance if you no longer have kids at home or a spouse whom you’re financially supporting.

In fact, there’s a long list of insurance products you could probably drop from your budget, as we illustrate in “9 Types of Insurance That Might Be a Waste of Money.”

3. Supporting grown children financially

Outdoor group portrait of black multi generation family
Monkey Business Images / Shutterstock.com

Parents sometimes spend a lot of money to support their adult children. That’s money retirees, particularly those with meager savings, really can’t afford to spend.

While it’s understandable that parents want to help their children, there are ways for you to lend a hand financially without paying their bills or handing over cash.

4. Maintaining two cars

senior man woman couple asian chinese convertible red car drive ride
Andy Dean Photography / Shutterstock.com

Two cars are often a necessity for households in which two partners work.

However, retirees who have more flexible schedules may be able to easily get by with a single vehicle.

Transportation is the second-largest expense category for retirees, according to federal data. Ditching the second vehicle can save money on insurance, gas and registration fees.

To further cut your costs, review these six ways to save money on your remaining vehicle.

5. Refusing to downsize

seniors couple man woman backs turned looking at house home
Andy Dean Photography / Shutterstock.com

Transportation is second only to housing when it comes to retiree expenses. One-third of spending in households led by someone age 65 or older goes to keeping a roof over everyone’s head, according to Bureau of Labor Statistics data.

You would think empty nesters might be keen to move to smaller, less expensive homes, but half don’t. In fact, nearly one-third actually upsize to a bigger house to accommodate visiting family members, says a Merrill Lynch-Age Wave study.

Retirees who are stretching their dollars should consider whether money on a bigger home is well-spent if the rooms remain empty for most of the year.

6. Insisting on brand-name medications

pharmacist senior man patient prescription pharmaceuticals pills prescription pharmacy
Syda Productions / Shutterstock.com

Medications are one of the items you should always buy as a generic, regardless of whether you’re a retiree.

The Food and Drug Administration says generic drugs must have the same active ingredients and strength as brand-name medications, and they can cost up to 85% less.

Some stores will even give you certain generic prescriptions for free.

7. Donating to every charity that calls

bearded hispanic asian senior man computer credit card
Chaay_Tee / Shutterstock.com

Many retirees have big hearts and are quick to open their checkbook whenever approached about a good cause. However, people living off savings should be careful that they don’t give away too much and jeopardize their ability to live comfortably in the years to come.

What’s more, older Americans are often targeted by scammers who may use fake charity appeals to get money.

We have tips to help you donate to charity the smart way.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
11 Expenses to Cut Now If You Want to Retire Early
11 Expenses to Cut Now If You Want to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

This Type of Social Security Benefit Is Often Overlooked
This Type of Social Security Benefit Is Often Overlooked

The Social Security Administration is not helping certain people get money to which they are entitled, a report says.

10 Expenses You Should Not Put on a Credit Card
10 Expenses You Should Not Put on a Credit Card

Sometimes it’s simply safer to keep the plastic tucked away.

13 Small Gadgets Under $20 That Make Life Better
13 Small Gadgets Under $20 That Make Life Better

These inexpensive electronics will make your day-to-day life a little easier — and happier.

6 Investing Tools That Help You Diversify
6 Investing Tools That Help You Diversify

Here’s how you can lend to startup businesses, fund social causes or get in on investments once available only to the very rich.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

Why Cloth Masks May Increase Your Coronavirus Risk
Why Cloth Masks May Increase Your Coronavirus Risk

A new study finds that wearing a cloth mask can backfire if you don’t clean it properly.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.