Common Retirement Mistakes in Your 60s and How to Avoid Them
When Janet turned 62, she felt a wave of relief. Finally, she could claim Social Security and supplement her part-time income. The monthly check seemed like a blessing after years of financial stress. But 3 years later, watching her friend, Karen claim Social Security at full retirement age and receive a bigger amount monthly, Janet realized her eagerness had cost her a significant amount of money over her lifetime.
Most retirement mistakes are entirely preventable with proper planning and awareness. Understanding the most common pitfalls can help you navigate your 60s successfully and enter retirement with confidence and financial security.
Mistake 1: Claiming Social Security Too Early
The decision of when to claim Social Security represents perhaps the most consequential financial choice you’ll make in your 60s.
Recent Social Security Administration data reveals encouraging trends in claiming decisions. The average claiming age has risen to about 65. This represents significant improvement from 20 years ago, when more than half of people claimed Social Security at 62 despite permanently reduced monthly payments.
However, many retirees are still missing substantial opportunities. Delaying until age 70 can result in monthly benefits that are significantly higher. Over a 20-year retirement, this timing decision can impact lifetime benefits by hundreds of thousands of dollars.
The claiming decision becomes more complex for married couples. Spousal benefits, survivor benefits, and file-and-suspend strategies create different opportunities that require careful analysis. Many couples can increase their lifetime Social Security benefits through strategic claiming.
What you can do:
Delay claiming Social Security if possible and run the SSA’s calculators to compare benefits at different ages. Married couples should discuss spousal and survivor strategies to maximize lifetime benefits.
Mistake 2: Underestimating Retirement Expenses
Many pre-retirees assume their expenses will drop significantly in retirement, but research shows this often proves overly optimistic. Spending in retirement can vary from year to year and is often unpredictable. While some costs decrease (commuting, work clothes, retirement contributions), others can increase (healthcare, hobbies).
The common rule of needing 70-80% of pre-retirement income often proves inadequate for people who want active, fulfilling retirements. Recent data shows that many retirees spend more in their early retirement years than they did while working.
Retirees also often underestimate the impact of inflation on fixed expenses. Housing, utilities, and food costs continue rising throughout retirement, requiring income sources that can keep pace with inflation.
What you can do:
Create a detailed retirement budget that accounts for realistic expense patterns. Track your current spending for several months to understand your true cost of living. Then adjust for expected retirement changes.
Mistake 3: Neglecting Healthcare and Long-Term Care Planning
Healthcare costs represent a particularly large and growing expense. According to the 2025 Fidelity Retiree Health Care Cost Estimate, a 65-year-old individual may need $172,500 in after-tax savings to cover healthcare expenses in retirement. This figure excludes long-term care, which can add hundreds of thousands to total healthcare costs.
Medicare eligibility begins at 65, but many people don’t understand the enrollment requirements and coverage gaps. Missing initial enrollment periods can result in permanent premium penalties and inadequate coverage can create financial disasters.
Additionally, long-term care planning becomes critical in your 60s because insurance premiums increase dramatically with age and health changes. These costs can quickly deplete retirement savings without proper planning.
What you can do:
Long-term care insurance, if purchased in good health during your 50s or early 60s, can provide valuable protection. However, premiums have increased significantly, and many insurers have exited the market. Self-insurance through dedicated savings or hybrid life insurance products with long-term care riders provide alternatives.
Health Savings Accounts (HSAs) offer excellent long-term care planning tools for those who qualify. HSA funds can pay for qualified long-term care expenses and insurance premiums, providing tax-free benefits for healthcare costs.
Mistake 4: Poor Tax Planning in Retirement Transition
The transition to retirement creates unique tax planning opportunities that many people miss. Understanding how different retirement accounts are taxed and planning withdrawal strategies can save thousands in taxes annually.
State tax considerations become important for retirees who are flexible about where they live. Some states don’t tax retirement income, while others provide significant exemptions. For retirees with substantial retirement account balances, state tax differences can save thousands annually.
What you can do:
Review how your retirement income will be taxed at both the federal and state levels. Compare state tax rules — including exemptions on pensions and Social Security — to see if relocating could make your retirement dollars go further.
Mistake 5: Inadequate Estate Planning Updates
You may have created estate planning documents years ago but haven’t updated them to reflect current circumstances, family changes, or tax law modifications. This oversight can create problems for families and reduce wealth transfer efficiency.
What you can do:
Beneficiary designations on retirement accounts, life insurance policies, and other financial accounts override wills and should be reviewed regularly. Outdated beneficiaries are common and can create unintended consequences for families.
Powers of attorney for healthcare and financial decisions become increasingly important as you age. These documents specify who can make decisions on your behalf if you become incapacitated. Without them, families may need court-appointed guardianships, which are costly and time-consuming.
Creating Your Action Plan
“The 60s represent a crucial decade for retirement preparation, yet too many people make preventable mistakes that can cost them dearly,” says Darren Nomberg, Senior Vice President, Investments at David Lerner Associates.
“The key is taking a comprehensive approach that addresses Social Security optimization, spending habits, healthcare planning, and tax strategies together. These decisions are interconnected and addressing them individually often leads to suboptimal outcomes.”
Social Security claiming strategies and Medicare enrollment requirements are a good place to start. These government programs have specific rules and deadlines that create permanent consequences if missed or misunderstood.
Review your investment allocation to ensure it provides both stability for near-term needs and growth for long-term purchasing power protection. Consider working with an investment counselor who specializes in retirement planning and can model different scenarios for your specific situation.
Most importantly, recognize that retirement planning in your 60s requires integrated strategies that consider all aspects of your financial life. The decisions you make during this critical decade will impact your retirement security for the rest of your life.
Material contained in this article is provided for information purposes only. It is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. These materials are provided for general information and educational purposes, based on publicly available information from sources believed to be reliable. We cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual’s circumstances. Each taxpayer should seek independent advice from a tax professional based on his or her circumstances. The subject of this article is fictitious and created for illustrative purposes only. It is based on events of a similar nature and should not be interpreted as a direct depiction of any specific individual, organization, or incident. Any resemblance to actual persons, living or deceased, or actual events is purely coincidental.