You've worked hard all your life, so you deserve to enjoy yourself in retirement. However, when you live on a fixed income, it's important to keep track of where every dollar is going and not spend money carelessly.
I spoke to financial experts and business leaders to find out the most common ways retirees waste money -- so you know what not to do and can make better decisions that enable your retirement savings to last well into your golden years.
A financial advisor can be a great asset when it comes to retirement planning, but make sure you're not paying them higher fees than you need to be.
"Investment fees can run 1-2% of your assets. For retirees with a million dollars invested that's $10-20k a year," said speaker, writer, teacher and financial coach Jillian Johnsrud. "If you're only getting an hour check-in per year, that's an expensive phone call. If you're using an advisor, make sure you're getting service that matches the cost."
Missing Out on Senior Discounts
Finding places that offer a senior discount might take a little research, but the pay-off is worth it.
"One of the ways retirees waste money is not taking advantage of the senior discounts available," said Steve Gickling, founder of ETLrobot. "From restaurants to travel and entertainment like movies and museums, there are all types of senior discounts available. It just requires some research like checking online blogs, directories and sites like AARP for where to find these deals."
Not Focusing On Their Health
Sure, signing up for a gym membership and buying fresh produce might cost more than sitting on the couch and eating frozen meals, but not keeping your health on track will have much greater costs in the long run.
"The largest cost to many retirees is healthcare, and it's a direct result of most people not maintaining a healthy lifestyle," said author, entrepreneur, business coach and mentor Todd Herman.
Take a Look: What To Sell When You're Ready To Retire
Remodeling Their Home
Making unnecessary upgrades to your home can be a big waste of money -- especially if you make early withdrawals from your retirement savings to fund these projects.
"The worst thing a retiree can do is take their hard-earned money out of their retirement accounts early to do a remodeling project or make a large purchase," said Jon Bradshaw, president of Appointment. "It's important to make sure that retirement money can last because there are no new income sources that can replace those funds. It's better to forego those kinds of projects or purchases."
Supporting Adult Children
"We all love our kids but when they become adults, it's time for them to support themselves," said Stephen Dalby, founder and CEO of Gabb Wireless. "Retirees can waste a lot of their money if they continue to support their kids into their adult years. With short-term circumstances, it can make sense to help them out, but it's a mistake to do it for the long term."
Carrying Credit Card Debt
Charging more on a credit card than you can pay off can be a major source of money issues in retirement.
"Carrying any credit card debt is a huge money waster for retirees," said Renee Johnson, editor-in-chief of The TechReport. "I might even go as far as to say retirees should forego credit cards because they are on a fixed income and should just live within their monthly income. Otherwise, it becomes too easy to put things on credit and then have to pay out more money for paying it back over time thanks to the interest charges."
Consider making all purchases in cash if possible or only using a debit card.
Overspending on Cars
Mark Charnet, founder and CEO of American Prosperity Group in Pompton Plains, New Jersey, said that there's no good reason to buy a luxury car in retirement.
"Let's face it, a $25,000 car and a $100,000 car will [both] take you between points A and B. Is the luxury of the more expensive car worth jeopardizing your financial future? I don't think so," he said.
Having Multiple Cars
In addition to forgoing luxury cars, retirees should consider downgrading to a single vehicle if they have more than one.
"Unless you are a car aficionado and can fund this hobby, it's a money waster for retirees to have multiple vehicles," said John Occhipinti, CEO of Naturebox. "Instead, having just one vehicle means one or no car payment, as well as lower insurance, maintenance and fuel costs. That money can be better spent on other monthly expenses."
Read More: Is Now a Good Time To Raid Your 401(k)?
Falling Victim to Scams
"Scams, fraud and identity theft are targeted at retirees more than 35 times more than other age groups," said Kevin Prince, founder and CEO of StratoZen, a leading cybersecurity firm. "Scammers can micro-target individuals, and have sophisticated systems and legitimate sounding personnel ready to drain the bank accounts of unsuspecting retirees."
The best way to avoid losing money to a scam is to educate yourself. You can sign up for email alerts about common scams by visiting ftc.gov/scams.
Making Long-Term Investments
Retirees don't have the same timeline as younger investors do to see returns, so they should build and adjust their portfolios with this in mind.
"I see retirees start to invest in things they shouldn't," said Robert Glazer, founder and CEO of Acceleration Partners. "The problem is that much of the investment landscape is meant for the long term rather than the more limited time retirees have. When they make these investments and then see their retirement funds get squeezed, they don't have the same amount of time to recoup those losses as someone that's still working."
"Your home is your castle, but as you age, you need to downsize that castle, or it will start draining your retirement funds," said Chalmers Brown, chief technology officer at Due. "Although you want room for the kids and grandkids, you also don't want to spend money on cleaning and maintenance on those additional rooms and large yard. Find a smaller place that offers more maintenance-free living and save that retirement money for something else."
Or Even Worse, Upgrading Their Home
"Too often we find people want to buy a big home a couple of years from retirement or when transitioning into retirement, which is the complete opposite strategy [of what] we recommend," said Michael Lackwood, founding principal of New York-based Spring Delta Asset Management, who also recommends downsizing in retirement.
Shopping as a Hobby
"Retirees tend to have a lot more time on their hands. With that time, they may find themselves browsing and spending money at the mall or filling up their cart online," said serial entrepreneur John Rampton. "It's often for stuff they don't really need, but it's something to do. It would be better to find and develop hobbies to fill that time that may still require a little money, but not as much as mindless shopping."
Having Other Costly Hobbies
Shopping isn't the only hobby that can be a money suck.
"Everything must remain within moderation, and that goes for any costly hobbies you may enjoy," said Lackwood.
Before deciding you want to take up scuba diving or yacht racing, make sure the money you will need to fund these activities won't blow your retirement budget.
Buying Insurance They Don't Need
"Many retirees carry unnecessary insurance products that they continue paying for but can't get any value from," said Nate Nead, managing director of Investment Bank. "Drop life insurance products and disability insurance when you are no longer working or focused on providing for kids that are still living at home."
Or Overspending on Insurance They Do Need
For the insurance plans you do need, make sure you're getting the best rates possible.
"Whether it's auto, home, health or life insurance, retirees are likely overpaying for their insurance," said Leslie Tayne, founder and head attorney at debt solutions law firm Tayne Law Group. "As far as auto insurance goes, make sure to periodically check other insurance companies to make sure you're still getting a good deal on your policy. Depending on your state of residence, see if discounts are available for completing a defensive driving course. For reducing your home insurance policy, let your insurance company know that you retired. Many insurance companies offer a discount for retirees. Finally, make sure that your beneficiaries are up to date with your life insurance company -- for example, if your spouse passed away or you remarried. You can likely decrease coverage if your spouse passed away, if your mortgage is paid off or if your children are adults. It's essential to have the policies reviewed periodically to ensure that you have the best rates and the appropriate insurance for your needs in retirement."
Options: Most Tax-Friendly States To Retire
Being Overly Generous
"Although it's a good thing to donate to charities, you don't have to contribute to every one that reaches out to you," said Jason Powell, real estate and securities attorney at Estate Investing. "As a retiree on limited monthly income, select one or two to contribute money to and then focus on other ways you can help those other nonprofits. With more time on your hands, you can do volunteer work. Not only does it not cost you anything, but it also provides an enriching experience."
Owning Two Homes
If you have a second home, consider selling it before retiring -- otherwise, it can turn into a money pit.
"The maintenance and real estate taxes can be too much to maintain," Lackwood said. "Also, tax laws around real estate have been less favorable for second homes. Sell the second home and use the proceeds for hotels and home rentals on various family trips."
Keep Reading: The Complete Guide to the Best Retirement Age
Collecting Social Security Too Early
Even if you're able to start collecting Social Security, it's best to hold off on claiming your benefit as long as you can to max out how much you get.
"Don't start collecting your Social Security too early," said Yenn Lei, head of engineering at Calendar. "If you do, you're essentially wasting money. That's because you are leaving money on the table that you could have had if you just waited another year or so. It's a big difference, too, because if you wait until you are 70 instead of taking the money at 62, you could get approximately 30% more."
Want To Retire In One of America's Safest Cities? $1 Million Might Not Get You Far
Not Making the Most of Their Social Security Claim
Collecting too early isn't the only money-wasting Social Security decision retirees can make.
"Sometimes retirees, unfortunately, lose a spouse and don't realize that if that deceased spouse is older than 65, the living spouse can collect on their deceased spouse's Social Security while they are still working," Lackwood said. "After the living spouse retires, they will need to choose the higher of the two Social Security payments to receive for the remaining years of their life."
Forgoing Medicare and Long-Term Care
Some retirees waste money on self-insuring for healthcare instead of buying long-term care and supplemental Medicare, Lackwood said.
"Consider opting for all the supplemental Medicare to ensure you aren't paying out of pocket for too much when more could be covered," he said. "Also, incorporate long-term care that integrates with life insurance, allowing individuals to offset the expensive cost of nursing care while not wasting the premium spent if you never need long-term care."
Frequently Dining Out
The occasional fancy restaurant meal is fine, but when it becomes a habit, this could mean trouble.
"Although you have worked and saved what feels like all your life, eating out five times a week is probably the lavish lifestyle that finds you outliving your money," Lackwood said. "Cooking helps you not only save money, but also most likely live longer."
Paying More Taxes Than They Need To
"When it comes to retirement planning, most people are focused on their annual 401(k) savings, investment returns and budgeting, but they do not plan for their taxes in advance," said Stoyan Panayotov, CFA, senior advisor and founder at Babylon Wealth Management. "Ultimately, we all have to pay taxes, but with proper advance tax planning, retirees can avoid unpleasant surprises and keep more money for themselves."
Don't Miss: Top 25 Tax-Friendly States To Retire
Not Reviewing Their Investment Portfolio
A "set-it-forget-it" approach to investing might work when you are younger, but it is not the best strategy for retirees.
"Review your portfolio for fine-tuning adjustments at least once a quarter, or once a month if you really want to be informed of what money is going out, versus what is being replaced from the performance you are receiving," Charnet said. "Develop and maintain a great relationship with your financial advisor, and if you don't have one, get one as soon as possible."
Cashing Out Their Pension
"Taking a lump sum on your pension could sound tempting -- who wouldn't want the extra money in the bank earning interest? Unfortunately, doing so could cost you thousands of dollars that your financial advisor receives as a commission," Tayne said. "Before making significant financial decisions, make sure you take your time, don't feel pressured, and read the fees and fine print to make sure that it's the appropriate time to withdraw funds."
Paying Too Much for Their Cellphone Plan and Other Utilities
Cellphone bills have become increasingly expensive, and retirees could be paying for unused data and other extras unknowingly. They could be overpaying for cable and other bills, too.
"Be sure to ask your carrier if they offer a discount for seniors or retirees," Tayne said. "T-Mobile and Sprint both have an exclusive plan for customers 55+, and it never hurts to ask if you're on another carrier. Cable companies and satellite television providers are also notorious for slowly increasing your bill over time, or offering promotional pricing for a one- or two-year period. Even if you are under contract, you can call and ask if you can get a better rate or downgrade your TV package."
Starting a New Business
Some retirees start a new business or side hustle to continue to earn income after leaving their 9-to-5. In some cases, this can be a smart money move, but in others, it can be costly.
"This is, unfortunately, one of the biggest potential drains on a retiree's finances," said Craig Kirsner, MBA, author, speaker and president at Stuart Estate Planning Wealth Advisors. "The fact is that most businesses fail, so starting one in retirement is typically not a good idea, no matter how good the business idea sounds."
If you're determined to start a business in retirement, do the math first to make sure that your money will balance out the money you expend. Consider launching a business you can do from home and without special equipment to keep overhead costs low.
Making Risky Investments
When you're retired, you should have less risk in your portfolio than before you left the workforce.
"Make sure you have the right risk for you because if you lost 50% of your retirement assets, you have to then earn 100% just to break even," Kirsner said.
Kirsner recommends speaking with a fiduciary financial planner before making any major investment decisions.
Not Differentiating Between 'Wants' and 'Needs'
In essence, retirees waste money when they don't take the time to differentiate between their wants and their needs. Allowing for a few "wants" every once in a while is fine, but that shouldn't be where the majority of your money goes.
"Before making a purchase, especially an expensive one, ask yourself, 'Do I really need this item, or just want it?'" Charnet said.
More From GOBankingRates
Gabrielle Olya contributed to the reporting for this article.