During your working life, you may have debts and other financial obligations. It’s not uncommon to need a tool like a monthly loan repayment calculator to help get your finances in order. By the time you retire, though, you should hopefully have a nest egg that you can rely on for support during your Golden Years.
It’s important for retirees to be careful with their money since there probably won’t be as many paychecks coming in to pad their bank accounts. However, some retired individuals can be careless and spend their nest egg too quickly.
In this article, we will talk about some ways that retirees can waste their hard-earned money. Once we identify the common mistakes, you’ll know what to watch out for.
1. Home Remodeling
If you’re retired and own your home, you will need to fix something if it breaks. For instance, if a toilet doesn’t flush the way it once did, you’ll need to call a plumber. If the roof leaks, you’ll need to get that repaired.
There’s a difference between home upkeep, though, and home remodeling. Home remodeling implies that you’re making changes that, while aesthetically appealing, are not strictly necessary.
If you’re in your later years and living off of a pension, your savings, or social security checks, you need to monitor that money very carefully. Installing a gazebo or skylight might be a nice thing to do, but it’s also a way you might burn through some cash that you can’t afford to spare. It makes sense at this age to be more selective about what you do to your home.
A retired person may reach a point where they decide to get rid of their car. They might live in an area where they can rely on public transportation, and there are always taxis or Ubers unless you live somewhere extremely rural.
If you decide to keep your car, you should probably downgrade to a modest one at some point instead of spending more to get a high-end one. You can get a reliable vehicle for $20K that will get you to where you need to go just as easily as one that costs three times that much.
Also, if you have multiple vehicles, you should probably go down to just one at some point. Multiple cares mean more maintenance, which doesn’t make much sense if you’re retired.
Scams are on the rise, and retired people can easily become a target for them. Perhaps you know about phishing scams, where someone online will send you a malicious email. They might portray themselves as the IRS, the Social Security Administration, or some other entity. They’ll try to get you to send them money or give out your personal information.
Keep a lookout for those, but also remember that phone scams can happen just as frequently. Scammers can be pretty sophisticated, and they can fast-talk you into giving up money or your social security number if you let down your guard.
If you fall victim to identity theft, you can see a scammer drain your bank account. These individuals target the elderly much more than anyone else, so try to stay vigilant.
Avoid Draining Your Financial Resources in These Ways
As a retired person, you should watch out for phishing scams, phone scams, and other ways that dishonest individuals might try to trick you. Don’t buy expensive cars if a cheaper one will do, and consider going down to one vehicle eventually if you own a couple of them.
Additionally, don’t make any big renovations unless you’re sure you can afford them. You’ll need to keep abreast of any home upkeep jobs, but that won’t typically cost you as much.
If you watch out for these ways that you might spend beyond your means, there’s no reason why you can’t enjoy your retirement.