Most people who reach 60 with a solid financial plan feel like the hard work is behind them. The decades of saving, the 401(k) contributions, the market ups and downs they stayed patient through – all of that is done. What’s left is just showing up for the payoff. That feeling, reasonable as it seems, is exactly where things start to go sideways.
The financial mistakes that hurt most after 60 aren’t the dramatic ones – not reckless stock picks or gambling debts. They’re the slow, structural errors: the wrong timing on a Social Security claim, the ignored tax trap inside a pre-tax retirement account, the healthcare bill nobody planned for. They’re the decisions that feel reasonable at the time and then compound into something very hard to undo. By the time the consequences show up, the window to course-correct has often already closed.
This isn’t a list of things you probably already knew to avoid. These are the moves that trip up careful, intelligent people – precisely because they don’t look like mistakes when you make them.
1. Claiming Social Security Too Early
Once you turn 62, you can sign up to start receiving Social Security. But claiming those benefits the moment they become available isn’t a good idea for most people. If your full retirement age is 67 and you file at 62, you’ll reduce your monthly payments by roughly 30% – for life.
That permanent reduction is the part people underestimate. It isn’t a temporary dip while you wait for benefits to “catch up.” If you can afford to delay until age 70, your benefit will be about 32% higher than it would have been at full retirement age. Over a 25-year retirement, that difference in monthly income compounds into a genuinely different financial life.
The scenario that catches people is this: they retire at 62 intending to draw mostly from savings and use Social Security as a supplement. Then an unexpected cost – a medical bill, a home repair, a period of helping an adult child – depletes those savings faster than planned. If you planned to get most of your retirement income from personal savings, unexpected costs could drain your IRA or 401(k) prematurely, leaving you heavily reliant on Social Security later in life at a rate you locked in years earlier, when you filed too soon. The 30% penalty follows you into your 80s.
2. Ignoring the Tax Bomb Inside Pre-Tax Retirement Accounts
A traditional 401(k) or IRA balance looks like a number in your favor. It’s not quite that simple. Every dollar sitting in a pre-tax account is a dollar the IRS hasn’t taxed yet, and at some point – on your schedule or theirs – it will be.
Once you reach a certain age, the IRS requires you to take annual distributions from your 401(k), traditional IRA, SEP IRA, and SIMPLE IRA, whether you need the money or not. These are called required minimum distributions, or RMDs. Under the SECURE 2.0 Act of 2022, RMDs must start at age 73, with a further increase to age 75 in 2033. The problem isn’t the distributions themselves – it’s that most people have no idea how large those forced withdrawals will be, and how hard they’ll push their taxable income into a higher bracket, potentially affecting Medicare premiums through IRMAA (the Income-Related Monthly Adjustment Amount, which raises your Medicare Part B and Part D costs when income crosses certain thresholds).
The window to address this is the gap between retirement and age 73: the years when your taxable income may be at its lowest. In the period between when you retire and when you begin tapping Social Security and retirement accounts, your tax rates may be as low as they’ll ever be. That’s the time to get money into a Roth via a Roth conversion, not a Roth contribution. A Roth conversion means moving money from a pre-tax account into a Roth IRA now, paying tax at today’s lower rate, and shielding that money from taxes forever after. Most people know Roth IRAs exist. Far fewer make the conversions while the window is open.
3. Underestimating Healthcare Costs
Ask most people approaching retirement what they expect to spend on healthcare and the answer is usually some vague figure anchored to their current premiums. That figure is almost always too low.
According to a 2025 Fidelity estimate, released in July 2025 as Fidelity Investments’ 24th annual Retiree Health Care Cost Estimate, a 65-year-old retiring in 2025 can expect to spend an average of $172,500 in healthcare and medical expenses throughout retirement. That represents a more than 4% increase over 2024 and continues the general upward trajectory of projected health-related expenses since Fidelity’s inaugural estimate of $80,000 in 2002. That earlier figure hasn’t just grown – it’s more than doubled in two decades, and there’s no reason to expect the trajectory to flatten.
Retirees are still on the hook to cover things like Medicare premiums, over-the-counter medications, dental and vision care, and long-term care – none of which are fully covered by Medicare. One in five Americans says they have never considered healthcare needs during retirement, a figure that rises to one in four among Gen X. Across all generations, 17% have taken no action at all when it comes to planning for health expenses in retirement. That’s not ignorance – it’s avoidance of a number that feels too large to think about. But ignoring it doesn’t shrink it.
The practical move is to open or maximize a Health Savings Account (HSA) while still working, if your employer plan qualifies. HSA funds roll over indefinitely, grow tax-free, and can be withdrawn tax-free for medical expenses at any age. It’s one of the few accounts that offers triple tax advantages: a deduction going in, tax-free growth, and tax-free withdrawals for qualified expenses.
4. Not Adjusting Your Investment Risk Profile
The standard advice for decades has been to shift investments toward bonds and away from stocks as you approach retirement. The criticism of that advice – that bonds underperform over long periods – has led many people in the other direction: staying heavily invested in equities well into their 60s and beyond.
Both extremes create problems. After retiring, you can’t afford large negative swings in your savings. Financial advisors often recommend a long-term strategy of leaving money in the market regardless of ups and downs – because over time, the market has historically ended up rising. But in retirement, you have to think more short-term, because you’ll need to access the cash. A 35-year-old can ride out a 40% market drop. A 67-year-old who needs to withdraw income this year cannot afford to do the same thing.
Sequence of returns risk is the key danger here: the timing of market losses matters as much as their size. If market dips coincide with retirement withdrawals, they can deplete a nest egg at a faster rate. Two retirees with identical portfolios can end up with very different outcomes depending on whether the market drops in year one of their retirement or year fifteen. A portfolio strategy that works fine in accumulation mode can fail badly in distribution mode, and the adjustment needed isn’t just about picking different funds – it’s about building a withdrawal strategy that doesn’t force you to sell assets at exactly the wrong time.
Retirement portfolio strategies vary by situation – for a broader look at the decisions that precede this, see our guide to the most critical retirement planning decisions before you retire.
5. Falling Victim to Financial Fraud
This one rarely makes it onto financial planning checklists. It should be at the top of them.
Scams reported to the Federal Trade Commission by adults age 60 and older reached $2.4 billion in 2024, up 26.3% from $1.9 billion in 2023 and up 300% from $600 million in 2020, according to a CNBC report on the FTC’s annual report to Congress. Because most fraud goes unreported, the FTC estimates the real losses experienced by older adults in 2024 may have been as much as $81.5 billion. That’s a crisis – and it’s accelerating.
The bulk of money lost was due to investment scams. These aren’t the crude “Nigerian prince” emails of twenty years ago. Modern investment fraud often arrives through social media, through a new “friend” in an online community, through a seemingly legitimate website with professional branding. As technology has evolved, criminals have capitalized on expanded ways to reach potential victims via emails, texts, social media, and online ads. A seemingly innocent text from a stranger may evolve into a trusting relationship, and when the scammer suggests putting money toward a great investment, the now-trusting person sends funds to an account they believe will be returned with huge gains.
Recovery is extremely difficult. “The scammers move really quickly to get the money and move it elsewhere, often overseas,” according to Kathleen Daffan, an assistant director with the FTC’s Bureau of Consumer Protection. After 60, a major fraud loss isn’t just a setback – it’s often unrecoverable. There’s no second career to replenish a depleted account. The time horizon for rebuilding is short and the damage is permanent.
6. Failing to Stop Accumulating Debt
Carrying a mortgage into retirement isn’t inherently dangerous. Carrying high-interest debt into retirement – or taking on new debt after 60 – is a different matter.
Balancing debt, retirement income, and assets becomes even more important to your financial security as you age. The math is straightforward: if your credit card interest rate is 22% and your retirement portfolio is returning 6-7%, you are losing ground every month you carry that balance. Fixed-income retirees have less ability to absorb interest payments than working people do, and debt payments reduce the income available for everything else – including healthcare, housing, and emergencies.
A less obvious version of this mistake is taking on new debt in early retirement to fund lifestyle spending. The first few years of retirement are often the most expensive, as people travel, renovate, help adult children, and spend on experiences they deferred during their working years. More free time and flexibility can make it easier to overspend. Events with grandchildren, home renovations, big-ticket hobbies – expenses can add up quickly as you adjust to a new lifestyle. Funding those years with debt means paying interest on discretionary spending at a time when your income is fixed and your recovery options are limited.
Watch total fixed expenses – mortgage (if any), car payments, insurance, utilities – as a percentage of monthly income. Financial planners generally suggest keeping that ratio below 50%. In retirement, if fixed expenses consistently exceed half your monthly income, you have very little room for anything to go wrong.
Read More: 10 Forgotten Skills People Learned Before Smartphones That Still Give Them an Advantage Today
7. Not Making the Most of Catch-Up Contributions
The last few working years are the highest-earning years for most people. They’re also the years when, counterintuitively, many people start easing off retirement contributions – assuming the account balance is “good enough” or that new contributions won’t have time to make a meaningful difference.
People aged 60 to 63 can now make “super” catch-up contributions of up to $11,250 in eligible workplace retirement plans, on top of the standard limit and any regular age-50+ catch-up contribution. That means someone in that age bracket could be contributing as much as $34,750 per year into a 401(k) in 2026. For IRAs, the catch-up amount for those age 50 and older is $1,100 on top of the standard contribution limit of $7,500, for a total of $8,600 – up from a total of $8,000 in 2025.
The argument that “contributions won’t grow enough to matter” misses two things. First, even a few years of compounding on a large sum matters, particularly if it’s invested in a Roth account where future withdrawals are tax-free. Second, money you contribute to a pre-tax account in a high-earning year gets deducted at your current, higher tax rate – meaning the government is effectively subsidizing a meaningful portion of your retirement savings in those final years.
Among retirement savers tracked by AARP’s Financial Security Trends Survey, just 36% expect to have enough money to be financially secure in retirement if they continue to save at their current rate. The increase in that shortfall concern comes specifically from adults 50-plus – those closest to retirement age. If you’re 60 and the math looks tight, the answer isn’t to reduce contributions and hope the numbers work out. Use every legal tool available to close the gap, and catch-up contributions are the most direct one on the table.
The Part Nobody Talks About
The through-line connecting all seven of these financial mistakes after 60 is timing. Most of them aren’t irreversible the moment you make them – they become irreversible later, when the window to fix them has passed and the consequences are locked in. The 62-year-old who claims Social Security early still has options for a few years. The 75-year-old drawing down a heavily taxed account while paying IRMAA-inflated Medicare premiums has very few.
The most common version of financial regret after 60 isn’t “I made one catastrophic decision.” It’s “I made several small decisions that each seemed fine at the time, and I didn’t notice how they added up until it was too late to change them.” The RMD tax bill that arrives at 73, the healthcare costs that weren’t factored into the withdrawal plan, the Social Security check that’s permanently 30% lighter than it could have been – none of those feel like emergencies the year before they happen.
What separates people who retire comfortably from those who struggle isn’t usually income or luck. It’s whether they sat down, sometime in their early 60s, and stress-tested the actual numbers – not the optimistic scenario, but the one where healthcare costs run high, the market drops in the first two years of retirement, and they live to 90. Some of these patterns lock in years before the consequences appear. Naming them isn’t a solution on its own – but it’s usually where an honest conversation about the numbers finally starts.
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.