American retirees are sabotaging their golden years with these 7 disastrous (but easy to make) money moves — how many have you fallen for?

1. Relying on equity as retirement savings

If you sell your home and move into an apartment to live off the equity, you’ve opened yourself up to a major financial error.

Let’s say you sell your Chicago home and pocket $400,000 in equity as your main source of savings. A two-bedroom apartment in the trendy Lincoln Park neighborhood averages between $2,400 and $4,500, according to Domu. Assuming a midpoint of $3,450, you’d spend $41,400 annually, or more than 10% of your equity. Even with no rent increases, your money would only last you just under 10 years and leave you without an asset to pass down to your family.

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Learn how you can set yourself up for a more prosperous future by exploring why so many people who work with financial advisors retire with more wealth.

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2. Relocating without researching the area

The Sunshine State has long ruled the list of America’s top retirement destinations. SmartAsset ranked three Florida cities in the top 11 for net inflows of people 60 and older after analyzing U.S. Census Bureau data for 2022: St. Petersburg, Clearwater and Cape Coral. Yet destructive hurricanes have created soaring costs for residents.

Dozens of home insurance companies have left the state to reduce risk exposure, and the six most expensive cities for coverage are on Florida’s Atlantic coast — with Hialeah’s annual average of $17,606 topping the list compiled by Insurify in 2023. Flood protection can add another $2,472 to your annual insurance premium.

3. Falling for elder scams

The FBI lists eight financial swindles that constitute the bulk of elder fraud. These include romance scams (where criminals use a fake online identity to gain a victim's affection, trust and money), tech support scams (fake IT workers try to fix a computer issue but gain access to personal information) and the grandparent scam (someone impersonates a child or grandchild in dire financial need).

The grandparent ruse has taken an insidious turn as AI voice cloning software now lets malefactors use audio snippets to create voice samples of a loved one. Even well-known outlets such as Descript boast that they can clone your voice in a minute using just seconds of audio.

Kiss your credit card debt goodbye

Millions of Americans are struggling to crawl out of debt in the face of record-high interest rates. A personal loan offers lower interest rates and fixed payments, making it a smart choice to consolidate high-interest credit card debt. It helps save money, simplifies payments, and accelerates debt payoff. Credible is a free online service that shows you the best lending options to pay off your credit card debt fast — and save a ton in interest.

Explore better rates

4. Counting on post-retirement work to pay the bills

The 2022 U.S. Federal Reserve Survey of Consumer Finances reported that just 54.4% of American families have a dedicated retirement account, which implies that countless seniors will count on working after retirement to help pay the bills. But health during your retirement years is unpredictable, even if you rule out disease or a life-threatening illness. The U.S. Centers for Disease Control and Prevention reports that more than one in four seniors fall yearly, resulting in three million ER visits and one million hospitalizations.

It could also be much harder to find work. Even some who haven’t hit 60 yet struggle to land work despite being qualified — perhaps too qualified. It can also be easy to fall behind on the latest skills that are commonly sought after as the years progress.

5. Overspending

Go ahead and buy that tricked-out sports car: You’ve earned it, right? Yes, but keep to the financial speed limit or risk a financial crash full of buyer’s remorse. In surveying more than 1,200 people for its 2024 Retirement Confidence Survey, the Employee Benefit Research Institute found that more than one-third of retirees said their travel or leisure expenses were higher than expected.

It’s safe to assume that much of that outlay leads to debt. Using U.S. Federal Reserve data, the Center for Retirement Research at Boston College calculated that between 1989 and 2019, the share of households with unsecured debt for ages 65 and up rose from about 25% to roughly 40%.

6. Jumping the gun on Social Security

Taking Social Security early can be costly. Let’s say you were born in 1960. If you started your benefits in 2022 at age 62, your monthly income would be 30% lower compared to the full retirement age. Instead of $1,000 per month, you’d receive just $700, according to the Social Security Administration.

Similarly, those born in 1963 will turn 62 in 2025 but their full retirement age is 67. A $1,000 monthly benefit claimed that year would be reduced to $700 — but if they wait until age 70, they get 132% of their monthly benefit in return for pushing it off for 48 months.

7. Borrowing from your retirement fund

Retired journalist Bob Niedt, writing for AARP in September, called this “[his] biggest retirement mistake.” As he explained it, the funds he took out weren’t able to grow, which meant years of lost compound interest and potential investment gains.

Niedt sees no shortage of irony in the fact that he was a business writer. While 401(k)s are often tempting as a cash source for a child’s tuition payments or to pay down credit card debt, explore other loan options first such as a parent PLUS loan for college students or a debt consolidation loan.