If you’re looking back on your expenditures from this year and wondering where you went wrong, you’re not alone. This may be especially true if you’re a new retiree. It can be hard to budget correctly for a lifestyle you haven’t led before.
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Here’s what financial experts say cost retirees too much money and how to allocate money better in 2026.
Misaligned Healthcare Plans
One of the biggest expenses for retirees is healthcare, and many retirees underestimate what they’ll spend on medical care in their later years, according to Whitney Stidom, vice president of consumer enablement at eHealth.
Stidom said, to avoid overspending, retirees should take advantage of the annual enrollment period (Oct. 15 to Dec. 7) to make sure they select the optimal Medicare plan based on their needs and budget. She said this step alone could save retirees more than $1,800.
For retirees who need help selecting a plan, there is free guidance available. “A licensed agent can help people review plans from various insurance companies in their areas, while providing expert advice — all at no cost,” Stidom said.
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Convenience
When people spend more time at home, they might be tempted to pay more to make sure everything they need comes to them.
Rami Sneineh, vice president and licensed insurance producer at Insurance Navy, said his team sees clients with multiple unused subscriptions and impulse orders as major areas of overspending for people on a fixed income. “Research indicates that the average person can easily spend almost $200 a month to simply send food home and go to the coffee shop,” he said.
Sneineh recommended that clients have two separate budgets: one for primary needs (housing, healthcare and utilities) and one for discretionary needs (travel, entertainment and hobbies). “I also recommend that one annually audits all memberships and subscriptions, since these often auto-renew without notice,” Sneineh said. “Managing these smaller expenses is a strong way to in turn make your savings last and have a real future peace of mind.”
Home Improvements
More time at home can also mean wanting to beautify the space that you live in. A few small projects to update the look of a home are fine, but when it’s taking a big chunk out of your retirement money, it might be time to reevaluate.
“The cost of home remodeling has increased substantially over the past few years and to pay them entirely from a taxable retirement account can be a substantial tax hit and a permanent portfolio stressor,” said Pedro M. Silva, a principal partner at Apex Invest. “We encourage clients to tackle all the home related projects in the years approaching retirement so they can be paid from cash flow and not from taxable retirement accounts.”
Scams
A lot of phone and email scams target retirees and can cost them their life savings if they’re not careful. Mike Kruse, a lawyer at Kruse Law, said the best way to avoid these scams is to stay vigilant.
“Always seek advice from a trusted financial advisor before making a big investment or cash outlay. Scammers will prey upon your desire to increase savings so it is important to do your own research first,” he explained.
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This article originally appeared on GOBankingRates.com: Here’s What Retirees Wasted the Most Money On in 2025 — and How To Avoid It in 2026
