7 Ways You’re Blowing Your Retirement Savings

If these actions sound familiar, you may want to make some changes

Donna Fuscaldo and Daniel Bortz,

Updated December 04, 2025

AARP

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En español

Published June 22, 2022

/ Updated December 04, 2025

funnel with cash going in the top and pennies coming out the bottom

AARP (The Voorhes/Gallery Stock)

If worrying about running out of money in retirement is keeping you up at night, you aren’t alone. More than half of boomers and Gen Xers (54 percent) say they fear outliving their retirement savings, up from 48 percent a year ago, according to an April survey from the Alliance for Lifetime Income, the nonprofit consumer education arm of financial services association LIMRA.

Inflation, rising retirement costs, tariff-induced price increases and geopolitical uncertainty are all contributing to our growing financial anxiety.

While you can’t control inflation or rising prices, you can take steps to control how long your money lasts in retirement. If any of the actions below sound familiar, it may be time for a reset.

1. You’re spending too much in the early days of retirement

Your entire working life was spent amassing money for retirement, so who can blame you if you want to indulge a bit early on. But do too much of that and you may run into problems down the road. “One of the big things we see is as soon as people retire, they treat every day like it’s Saturday,” says Bryan Kuderna, a certified financial planner in Red Bank, New Jersey. “They go into retirement projecting their expenses today will stay that way the rest of their lives. A few extra vacations and trips with family and friends, and before they know it, they spent much of their retirement account in year one or two.”

How to fix it: Consider consulting a financial planner, who can help review your budget and identify ways for you to rein in expenses.

2. You’re lending money too quickly

It’s natural to want to help your children and grandchildren, but too much of a good thing can leave you penniless. Before you book that cruise for the entire family or give your child the down payment for a home, make sure you can afford to. “The rule of thumb I tell my clients is first make sure you’re taking care of yourself financially,” says Matthew Curfman, a certified financial planner at Richmond Brothers in Jackson, Michigan. “If you don’t take care of yourself, you can’t help others financially.”

How to fix it: Learn to say no, at least for now. Make sure you have enough cash in the bank to live comfortably in retirement before lending a helping hand.

3. You’re wasting your home equity

Some people go into retirement with the intention of downsizing to a smaller home but then make a common mistake. Instead of saving on housing, they spend more, often by purchasing a vacation home. “They think they will downsize and will have all this equity from the house, so they buy a little condo up north and a little condo down south to do the snowbird thing. And all of sudden they didn’t downsize; they changed the situation,” says Kuderna.

How to fix it: Don’t treat the equity in your home as a windfall. Count it as a reliable income stream you can live off of in retirement.

4. You’re not planning for long-term care

About 4 in 5 adults 65 and older will require some long-term care, and about 40 percent will have high-intensity needs for more than a year, according to the Center for Retirement Research at Boston College . Some will have family members to rely on, but the majority will need to pay some of the expenses for long-term care on their own, and many have no plan to do so. “It’s a pretty expensive proposition to need a full-time nursing home or at-home care,” says Curfman. “If you do nothing and something happens, you’ll have to pay for it somehow.”

How to fix it: Add long-term care coverage to your retirement savings plan. Depending on your situation, it may mean setting aside money in a health savings account, getting a long-term care insurance policy or working with a financial adviser to devise another tax-efficient strategy.

5. You have a lot of debt

Lingering or new debt can be a big drag on your retirement savings. For example, credit card debt may have been easy to manage when you were collecting a paycheck, but it can hurt your cash flow and lifestyle when you’re living on a fixed income.

How to fix it: Try not to bring any debt with you into retirement. If you do, devise a plan for paying it off, and resist accruing new debt.

6. You’re living on pretax income

Taxes are a big consideration when you begin withdrawing money from your retirement savings account. If it’s a traditional 401(k) or IRA, withdrawals are taxed as ordinary income. “It has a ripple effect on your overall tax situation and cash flow,” says Kuderna. “That $1 million is suddenly $700,000. It’s not going to last as long.”

How to fix it: Consider moving some of your retirement savings into a Roth IRA, or convert your traditional 401(k) into a Roth 401(k). With both investment vehicles, you don’t pay taxes on withdrawals once you’ve had the account for five years and are 59½ or older. But keep in mind that you’ll pay taxes on the conversion.

7. Your investments aren’t keeping up with inflation

The great wealth-eroding factor has always been inflation. And diminishing purchasing power isn’t the only problem during periods of high inflation — your investments have to work harder to hold their value over the long haul.

“People entering retirement at 65 think they should be all cash or fixed income,” says Kuderna. “That money is for when they are 80. It can be in the markets and keeping pace with inflation.”

How to fix it: A portfolio checkup may be in order to ensure your investments are allocated properly. The goal is a well-diversified portfolio that has just the right amount of risk based on your age, assets and other factors.

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Donna Fuscaldo is a contributing writer and editor focusing on personal finance and health. She has spent over two decades writing and covering news for several national publications including The Wall Street Journal, Forbes, Investopedia and HerMoney.

Daniel Bortz is a personal finance editor at AARP, where he writes and edits money content for the website, from saving and budgeting to building wealth and money management skills. His work has been published by the New York Times, the Washington Post, Consumer Reports, Entrepreneur, Kiplinger, Newsweek, Money and other national publications.