Retirees: These 8 Money Mistakes Could Be Costing You Thousands Per Year

After decades of building your nest egg, even just a few small missteps can lead to big losses if you’re not proactive.

Luckily, a few well-timed tweaks can help protect your money and maximize what you have. Below we outline some of the most common retirement mistakes we see, and how to fix them.

Mistake #1: The Social Security bonus most retirees completely overlook

Most retirees know that waiting to claim Social Security boosts their own benefits until age 70. But here’s what many Americans miss: spousal benefits don’t grow past your full retirement age (66–67). If you wait longer, you simply lose these benefits.

For someone whose spouse qualifies for the maximum benefit (about $3,960 per month in 2025), the spousal benefit is half of that — $1,980 per month, or $23,760 a year. Many retirees miss this entirely! And this also applies to divorced spouses who were married for at least 10 years.

The fix: Once you reach full retirement age, review your eligibility for spousal or survivor benefits right away. Otherwise, you could forfeit thousands each year.

Mistake #2: Hurting Your Retirement by Trying to Manage a $100k+ Portfolio Alone

Once your portfolio crosses the six or seven-figure mark, the stakes get higher. Even small mistakes can add up to huge losses.

Studies show people who work with a financial advisor could end up with about 15% more money in retirement on average. Over a 30-year retirement, that could mean hundreds of thousands of dollars in extra spending power.

An advisor can help you optimize asset allocation, tax strategy, withdrawals, Social Security timing, and more — especially if you’re planning for healthcare, travel, or legacy goals.

The key is to use a fiduciary advisor, which are legally required to act in your best interest (not all advisors are), and to avoid overpaying for an advisor.

This tool from SmartAsset connects you with up to 3 vetted fiduciary advisors that serve your area. No cost, no pressure — just a quick call to see if a vetted advisor is right for you.

Mistake #3: Underestimating how credit card interest can drain your nest egg

In retirement, credit card debt is especially risky. If this isn’t something you’re dealing with, great -- skip ahead to #4. But if you’re feeling the burden of credit card debt, paying it off should be your top priority.

The fix: The Wells Fargo Reflect® Card gives you 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers (then 16.99%, 23.49%, or 28.74% Variable APR. rates and fees). That’s by far one of the longest interest-free periods available today.

Move your debt to this card and you’ll get nearly 2 full years interest-free where every dollar goes directly toward eliminating your debt, not to the bank.

And the best part? There’s no annual fee. You can learn more and apply here.

Mistake #4: Letting your bank keep $870+ of your cash each year (and not spending five minutes to fix it)

Many retirees keep a healthy emergency fund. But most regular bank accounts pay next to nothing in interest -- often .01% APY (annual percentage yield) -- and your bank is counting on you not paying attention.

Look at what $25,000 earns in different accounts:

Traditional bank account (0.01% APY): $2.50 per year
High-yield savings account (3.50% APY): $875.00 per year
Difference: $872.50 per year

The solution is simple: move your money to a high-yield account. We like American Express® High Yield Savings Account (Member FDIC) which offers a 3.50% APY (as of October 1, 2025) -- that's 8X the national average interest rate. Plus, your money is fully FDIC-insured up to $250,000.

It’s not an exaggeration to say this 5-minute move could earn you thousands of dollars over the next few years. You can open an account here.

Mistake #5: Overlooking guaranteed income from CDs

In retirement, stability and high returns on cash is important -- and few tools are better for this than certificates of deposit (CDs).

CDs are great if you want guaranteed returns and you know you won't need the cash in that time period, since there are often early withdrawal penalties (if you want more flexibility but non-guaranteed returns, go with a high-yield savings account instead).

LendingClub offers among the best CD rates we've seen: an excellent 4.45% APY on a 8-month term. That’s a strong, fixed return for anyone who wants their money working without stress. You can learn more and open an account here.

Mistake #6: Overpaying by $400+ every year for car insurance

You’ve probably noticed your car insurance premiums have skyrocketed over the past few years.

Insurance companies love loyal customers -- because they can quietly raise your rates while offering discounts to new customers. Many drivers are overpaying by $400-$1,000 annually without realizing it.

The simple fix: A 2-minute comparison could save you hundreds. This free tool shows you exactly how much you're overpaying:

Enter your ZIP code
Answer a few quick questions
See if you’re overpaying and switch if you want to

Worst case? You stick with what you have. Best case? You save hundreds with almost no effort. Either way, it’s worth a 2-minute check.

Mistake #7: Ignoring the Stock Picks That Could Create Life-Changing Wealth

While CDs and savings accounts are great for protecting the cash you might need in the near term, they may not outpace inflation or support a long retirement.

That’s where The Motley Fool’s Stock Advisor comes in. Created by our parent company over two decades ago, Stock Advisor has helped millions of Americans build real wealth. Over 20+ years its stock picks have averaged 994% returns compared to just 172% for the S&P 500.

It’s easy to follow: You’ll get 10 “best buy” stocks today, 2 new picks each month, full research reports, and access to all past recommendations. Plus, access to exclusive retirement planning content through GamePlan, and much more.

And it’s backed by a 30-day money-back guarantee when you sign up here.

Mistake #8: Using the wrong card for everyday spending? You could be missing $800+

If you're using cash, debit cards, or just a basic credit card for your everyday spending, you could be missing out on $500-$1,000 in cash back every year.

You're spending money anyway -- why not get rewarded for it?

Plus, credit cards have much better fraud protections than debit cards or other forms of payment.

The Discover it® Cash Back card (see rates and fees) is our top pick -- in fact, more of our experts use it personally than any other card.

Here’s why it stands out:

Discover will match all the cash back you’ve earned at the end of your first year. Earn $400? They'll turn it into $800.
Earn 5% cash back on purchases in rotating categories each quarter, on up to the quarterly maximum when you activate — that's one of the best cash back rates available.
Long 0% intro APR period for 15 months on both purchases and balance transfers (then a 17.99% - 26.99% Variable APR applies).
$0 annual fee

Bottom line: This card could put $800+ back in your pocket this year, and it takes just 3 minutes to apply using this link (see rates and fees).

Bottom line

Retirement doesn’t come with a playbook, but avoiding just a few common missteps could help you unlock thousands of dollars (or more) in savings, income, and peace of mind every year.

The key is being proactive. The sooner you act, the more flexibility, income, and confidence you’ll have in your retirement years.

If you'd like help for optimizing asset allocation, tax strategy, Social Security timing, and more, start today with this tool from SmartAsset to connect with up to 3 vetted fiduciary advisors in your area.

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