15 Reasons Many Retirees End Up Broke (And How You Can Avoid It)
Retirement isn’t always beach walks and golf swings. For many people, it feels more like being retired and broke, checking the fridge and realizing the leftovers have to stretch until payday.
That dream of freedom after decades of work? It can turn into a financial mess if you retire broke and don’t prepare.
A 2024 report from the National Council on Aging found that 80% of households with older adults in the U.S. are either financially struggling or at serious risk of ending up broke in retirement.
And if you think it can’t happen to you, think again.
Here are the biggest money mistakes that leave seniors just getting by instead of enjoying life.
You’ll see why so many people end up old and broke, what goes wrong, and how you can avoid becoming one of the millions hitting 70 and broke.
Table of Contents
Not Adjusting Lifestyle Expenses
The paycheck may stop, but many retirees keep spending like it didn’t. That’s one of the fastest ways to end up broke at 60 or retiring broke in your 70s.
Retirement should come with a reset button on lifestyle spending: less on restaurants, shopping sprees, and random Amazon packages, more on the essentials.
What makes it worse is that healthcare and long-term care start creeping up just as income drops. According to the Employee Benefit Research Institute, nearly one-third of retirees already feel like they’re spending more than they can afford.
The smart move is to build a leaner budget before retirement, not after you’re already in the hole. Track where your money is going, then cut what doesn’t matter.
You’re not being cheap, you’re protecting yourself from being old and broke later.
Overspending in Early Retirement
The first few years of retirement can feel like a long weekend. No alarm clock, no meetings, no stress, so you spend like you’re making up for lost time. Travel, hobbies, gadgets, restaurants, it all adds up fast.
The problem? You’re burning through cash without realizing this phase has to stretch for decades. More time doesn’t mean more money.
If you’re not careful, overspending now can leave you retired and broke just when the real costs show up later.
The fix is simple: build a budget that separates the must-haves from the nice-to-haves. This keeps you from being one of those seniors just getting by instead of actually enjoying retirement.
Related: Retirement Shock: 22 Expenses Boomers Might Struggle to Afford Soon
Not Saving Enough
This one’s obvious, but still worth hammering in. Too many people hit retirement with almost nothing saved and just hope it all works out.
According to recent data, almost one in four Americans has no retirement savings at all. That’s not a small group, that’s millions heading into retirement already broke in retirement before it even begins.
You can’t retire on vibes. The earlier you start saving, the easier the whole game gets. Compound growth is real, and time is the only thing that makes it work.
If you waited too long, then saving aggressively now isn’t optional, it’s survival.
Paying More Taxes Than Necessary
Taxes don’t retire when you do. In fact, retirement can create some of the most complicated tax years of your life.
You’ve got IRAs, 401(k)s, Social Security, maybe even a pension, and without a plan, you’ll give Uncle Sam a bigger cut than necessary.
The key is to have a tax strategy in place before you retire. Tax-efficient withdrawals can stretch your savings and help you avoid becoming retired and broke.
Without this planning, your tax bill could eat into your nest egg and shorten the time you have to enjoy retirement.
Related: Special Tax Benefits of Getting Older: 19 Tax Breaks You Can Claim After 50
Falling for Scams
Scammers love targeting retirees. Why? Because they assume you’ve got money, free time, and maybe not the sharpest radar anymore. The fraud today is slick, not some obvious stuff.
Promises of high returns with “no risk,” unsolicited calls pushing investments, and fake advisors with glossy websites are all designed to suck you in. And it works.
Billions are lost every year, leaving many seniors just getting by or completely broke in retirement.
Keep this one rule: if someone’s promising guaranteed gains or wants sensitive info fast, walk away. If it sounds too good to be true, it’s already stealing from your future.
High Debt in Retirement
Debt in retirement is a nightmare, and it’s becoming more common. Today, about 70% of retirees are carrying outstanding credit card debt, a huge jump from just 40% two years ago.
That’s how you end up broke at 60 even after decades of hard work.
If you’ve saved for years, the last thing you want is high-interest payments draining your income. This kind of financial burden can limit your freedom and eat into your savings if you don’t deal with it early.
The best move is to prioritize debt repayment during your working years. Waiting until you’re older means you risk being old and broke when you should be enjoying retirement.
Related: 23 Mistakes To Paying Off Debt That Keeps People Poor (And How to Fix Them)
Underestimating Medical Expenses
Medical costs don’t go down in retirement, they skyrocket. Even with Medicare, you’ve got premiums, copays, prescriptions, dental, vision, and more.
A healthy lifestyle helps, but nobody avoids aging forever.
Most people underestimate just how much they’ll need, especially in their 70s and 80s. Without planning, medical bills are one of the fastest ways to end up retiring broke or broke in retirement.
The fix is building healthcare costs directly into your retirement plan. It’s not fun, but it’s the only way to avoid being one of those seniors just getting by.
Undervaluing Social Security Benefits
Too many people claim Social Security as soon as they’re eligible, like it’s some kind of “early bird gets the worm” deal. What they don’t realize is that claiming early can cut lifetime benefits dramatically.
That monthly check might feel good now, but waiting a few years can nearly double it. If you don’t understand the rules, you risk ending up retired and broke because you left money on the table.
If you’re not sure when to claim, ask an expert. Social Security isn’t free money, it’s a tool.
Use it wisely to avoid being one of those seniors just getting by.
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Getting Bad Financial Advice
There’s no shortage of advice out there. Problem is, a lot of it is junk. Salespeople pretending to be planners. Fake gurus with zero credentials. Advice that sounds good but drains your accounts over time.
The wrong advice doesn’t just slow you down, it can wipe you out. That’s how too many people wind up broke in retirement after trusting the wrong source.
Always check who’s giving the advice, what they gain from it, and if they’re qualified. Your money deserves better than someone’s sales pitch.
Related Video: 13 Pieces of Bad Financial Advice (That Most People Still Believe)
Ignoring Long-Term Care Planning
Here’s a hard truth: long-term care isn’t just for “other people.” It’s expensive, and most aren’t ready for it. According to the National Council on Aging, 80% of older adults can’t afford long-term care or even to age in place at home.
That’s a crisis waiting to happen. If you haven’t planned for assisted living, home health aides, or nursing facilities, you’re setting yourself up to be old and broke.
Insurance, dedicated savings, or other strategies need to be in place long before you need them. Waiting until it’s urgent is too late.
Spoiling Family Members
Helping out family feels good in the moment, until it wrecks your own financial future. Many retirees go broke funding their kids’ adult lives or playing ATM for grandkids. Good intentions don’t always lead to good outcomes.
Good intentions don’t always lead to good outcomes. You worked for decades to build this retirement, don’t hand it over just because someone asks.
Being generous is great. Going broke while trying to be the hero isn’t.
Related: Die With Nothing: Boomers Refusing To Pass Down Estimated $84 Trillion
Miscalculating Inflation’s Impact
You can’t see inflation, but it’s always there. It quietly eats your savings while you’re busy focusing on other things. A dollar today might only feel like 80 cents in a few years.
And that means your retirement budget better be flexible, or it’s going to fall apart.
If your retirement plan doesn’t account for at least 2–3% inflation annually, you’re working with fantasy math. That mistake is one reason so many people end up seniors just getting by.
Adjust your projections, increase your buffer, and reassess your withdrawals. Ignoring inflation is how you wind up old and broke without realizing it.
Related: How to Retire Early During Periods Of High Inflation (Like I Did)
Not Using Technology for Financial Management
We’re not in the age of ledgers and paper checks anymore. Today, you can track every penny with your phone. And yet, I meet retirees who still have no clue where their money goes each month.
That’s not just old-school, that’s risky. Ignoring the tools available makes it easier to overspend and end up broke in retirement.
Even simple budgeting apps can show you trends, help you cut waste, and keep your finances intact. If you can use Facebook, you can manage your money smarter. No excuses.
Lack of Emergency Fund
Retirement doesn’t mean surprise bills go away. Roofs still leak. Cars still break down. Medical stuff still shows up uninvited.
And if all your money’s tied up in retirement accounts, pulling it out in a pinch can trigger penalties and taxes.
Most financial experts recommend keeping six to twelve months of expenses in an accessible account. That’s a solid baseline. But for those who want a more precise cushion, track trailing expenses and anticipate major replacements, like appliances or vehicles, before they hit.
An emergency fund is what keeps you from becoming one of those seniors just getting by when life throws a curveball.
Relying Too Much on One Income Source
Putting all your retirement eggs in one basket is asking for trouble. People who thought their pension, rental income, or Social Security would carry them, until something changed.
A tenant stops paying. A pension gets cut. The government “adjusts” benefits. Suddenly, your plan collapses. That’s how too many end up retired and broke after thinking they were safe.
Retirement works best when you’ve got multiple streams of income. It’s not about getting rich, it’s about staying secure so you’re not one of those seniors just getting by.
Related: Income Streams of Millionaires, According to the IRS
Retirement Wake-Up Call
Retirement doesn’t care how hard you worked, it only responds to how well you planned. Going broke in your golden years isn’t rare, it’s common, and most people don’t see it coming until it’s too late.
The truth is, most retirees don’t go broke because of one big disaster. They get drained by a thousand small leaks, debt, medical costs, overspending, or bad advice.
That’s why so many end up old and broke or seniors just getting by when it didn’t have to be that way.
You worked too long to end up retired and broke, don’t hand your freedom back now.
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