4 Frugal Spending Mistakes Many People Make in Retirement

zamrznutitonovi / Getty Images/iStockphoto

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Sometimes saving money, especially when you err on the side of being cheap, can cost you. What’s the point of squirreling away every acorn if you can never enjoy the fruits of your labor? Yes, it makes sense when times are tough for retirees to tighten their belts, but sometimes the fear of running out of money leads to overly stingy spending habits that can unintentionally make life harder, more expensive or at the very least less enjoyable in the long run. 

While being careful with your budget is smart, becoming too frugal can create avoidable problems. Here are four common money mistakes many retirees make, plus what to do instead to protect your finances and quality of life.

Mistake 1: Neglecting Your Health 

Medical appointments can be expensive, and though you may feel like you’re saving a penny a day by keeping the doctor away, putting off needed healthcare can actually cost you more in the long run. Simply put, avoiding preventative care or necessary treatments due to cost can lead to bigger medical bills later.

Minor issues can become major, expensive conditions without early intervention. Instead, try taking advantage of preventive care offered by Medicare or keep an emergency savings fund for unexpected health expenses.

Mistake 2: Avoiding Professional Financial Advice

Whether it’s buying in bulk or avoiding going out for a nice dinner once and while, sometimes trying to save in every aspect of life can be counterproductive. Instead of over-economizing, seek the help of a professional financial advisor. 

Many retirees skip hiring a financial advisor because they don’t want to pay fees. While understandable, DIY retirement planning can lead to missed tax savings, poor withdrawal timing or investment decisions that reduce long-term stability. Keep in mind that a wrong move, like withdrawing from the wrong account, can cost far more than a financial advisor’s fee, but a small investment in professional guidance can protect your savings for decades.

If you want to dip your toe into guided retirement planning, consider a fee-only advisor for unbiased guidance or at least meeting annually to review taxes, Social Security strategy and investment allocations. You can also ask about hourly planning sessions if you prefer low-commitment support.

Mistake 3: Taking Social Security Too Early 

It’s tempting when living on a fixed income to lean into frugality and start claiming your Social Security benefits. However, delaying filing for your checks can actually get you the most per month. 

Though it can vary, in 2026, the current average Social Security check for a retired worker is around $2,071 per month. The maximum Social Security benefit varies by year and claiming age, but it’s around $4,152 monthly at full retirement age of 66 to 67 and only $2,969 if you claim early at age 62. However, if you delay getting your payments until age 70, it goes up to $5,181.

Mistake 4: Not Planning For Taxes and Inflation

Overfunding tax-deferred retirement accounts or failing to plan for rising costs can shrink your purchasing power. This means the money in these accounts buys less over time, especially for fixed incomes like pensions or annuities, forcing retirees to stretch savings further for everything from housing to groceries. 

Rather than feeling like you have less money than you do, try building diversified portfolios with inflation-resistant assets like real estate or stocks. You can also use flexible withdrawal strategies such as the 4% rule. This is a retirement guideline suggesting you can safely withdraw 4% of your initial savings in the first year of retirement, then adjust that dollar amount for inflation annually.

Wherever you land, remember to regularly review your retirement plan for rising costs instead of frugally avoiding putting more in than you have to. This would be a big mistake.

Share This Article: