What is the most common financial mistake people make in their 60s?

Claiming Social Security too early — nearly 50% of Americans claim at 62, the earliest possible age. This permanently reduces benefits by 30% compared to waiting until the full retirement age of 67 (for those born in 1960+). For a couple where both spouses earn similar benefits, the cost of both claiming at 62 rather than 70 can exceed $300,000-$500,000 in lifetime income.

When do I enroll in Medicare?

You have a 7-month Initial Enrollment Period: the 3 months before your 65th birthday month, your birthday month, and 3 months after. Missing this window and not having qualifying employer coverage triggers a late enrollment penalty on Part B: 10% per year you were late, permanently. This penalty stays with you for the rest of your life.

Should I pay off my house in my 60s?

If it's a low-rate mortgage (under 4%) and paying it off depletes your liquid savings, keeping the mortgage in retirement may be better. If paying it off can be done without materially reducing your portfolio and reduces fixed monthly obligations, it can be worthwhile for the peace of mind and cash flow benefits. There's rarely a one-size-fits-all answer — it depends heavily on your interest rate, portfolio size, and monthly cash flow needs.

Financial Mistakes to Avoid in Your 60s

The 60s are the decade when most financial decisions shift from building wealth to distributing it. The mistakes made here aren’t recoverable in the same way as those made at 30 or 40. Here’s what matters most.

Mistake 1: Missing Medicare Enrollment Windows

Medicare has hard enrollment deadlines with permanent penalties for missing them.

Medicare Part	Key Enrollment Window	Late Penalty
Part A	Initial Enrollment Period (7 months around 65th birthday)	Usually none (most get Part A free)
Part B	Initial Enrollment Period; or within 8 months of losing employer coverage	10% per year delayed, permanent
Part D (Drug)	Initial Enrollment Period; or within 63 days of losing qualifying drug coverage	1% of national premium per month delayed, permanent

The Part B penalty in practice: If you delay enrolling in Part B for 3 years without qualifying employer coverage, your premium is 30% higher for the rest of your life.

If you’re still working at 65 with employer coverage: You can delay enrollment in Parts B and D without penalty as long as you have employer-sponsored group coverage. But you must enroll within 8 months of losing that coverage.

Fix: Set a reminder for 3 months before your 65th birthday to begin Medicare enrollment. Don’t miss this window.

Claiming Social Security at the earliest possible age permanently reduces your benefit.

Claim Age	% of Full Retirement Age Benefit
62	70%
63	75%
64	80%
65	86.7%
66	93.3%
67 (FRA for 1960+)	100%
68	108%
69	116%
70	124%

When early claiming makes sense:

Poor health / terminal illness
No other income sources and cannot meet expenses
Single with no survivor benefit to protect

When delay clearly wins:

You expect to live past 80 (which most 65-year-olds statistically do)
You have other income sources (portfolio, pension, part-time work) to bridge
You’re married and want to maximize the survivor benefit for your spouse

Mistake 3: Ignoring Sequence-of-Returns Risk

Retiring into a bear market without a buffer strategy can permanently impair your portfolio.

The sequence problem: A 35% portfolio drop in year 2 of retirement, combined with monthly withdrawals, can cut your sustainable income permanently — even if the market fully recovers in year 5. The damage is locked in by the forced selling at low prices.

Protective strategies:

Maintain 1-2 years of cash/stable value for living expenses (don’t sell stocks in down years)
Use a dynamic withdrawal strategy — reduce withdrawals 10-15% in significant down years
Consider a small annuity to floor your fixed expenses (pension-like income stream)

Mistake 4: No Long-Term Care Plan

In your 60s, LTC insurance becomes significantly more expensive (or possibly uninsurable). This is the last practical window for purchasing traditional LTC insurance.

Probability of needing long-term care:

70% of people turning 65 will need some form of LTC during their lifetime
Average LTC need: 2-3 years
Average nursing home cost: $95,000-$110,000/year (private room)
Home health aide: $55,000-$80,000/year (full-time)

Options to fund potential LTC needs:

Traditional LTC insurance (if you can still qualify and afford)
Hybrid life/LTC or annuity/LTC policies
Self-insure: maintain $300,000-$500,000 liquid reserves specifically for LTC
Medicaid planning (spend down strategy with an elder law attorney)

Mistake 5: Failing to Start RMD Planning

Required Minimum Distributions begin at age 73. The 60s are the time to plan for them, not accommodate them reactively.

What RMDs mean: The IRS requires you to withdraw a percentage of all traditional retirement accounts each year starting at 73. These withdrawals are fully taxable as ordinary income.

Pre-RMD moves (60-72):

Roth conversions in lower-income years to reduce future RMD amounts
Qualified charitable distributions (QCDs) at 70½+: donate up to $105,000/year directly from IRA tax-free to charity (counts against RMD)
Consolidate retirement accounts for easier management

Mistake 6: Outdated Estate Documents

Retirement brings heightened importance for estate planning documents.

Essential documents to review/update in your 60s:

Will (especially if your situation has changed)
Durable power of attorney (for financial decisions)
Healthcare proxy / medical power of attorney
Advance directive / living will
Retirement account beneficiary designations
Life insurance beneficiary designations
Trust documents (if any)

Fix: Review all estate documents at the start of every decade — and after any major life change (divorce, death of a beneficiary, change in assets).