In your 60s and 70s, the goal should be to retire well, not impress your friends and family.
Unfortunately, it is easy to forget this simple principle. Many retirees quietly sabotage their financial future just to keep up appearances.
One in 12 baby boomers (8%) between the ages of 60 and 78 said they felt some social pressure to spend beyond their means and keep up with the financial status of someone in their peer group, according to LendingTree (1).
That’s a small minority, but if you’re in that group, you could be putting your personal finances at risk. Here’s why ‘looking poor’ is an important part of ensuring a comfortable and sustainable retirement.
Living below one’s means and defying social pressure to appear rich can provide structural benefits that compound over time.
First, flaunting your wealth risks attracting the wrong kind of attention. According to the Federal Trade Commission (2), adults over age 60 are more likely than other age groups to report losses of $100,000 or more due to financial fraud. In total, this group lost $81.5 billion to fraud in 2024.
If you’re bragging about your portfolio or dividend income or luxury vacations on Facebook, you could be putting yourself on the radar of increasingly sophisticated scam artists.
Second, a modest lifestyle gives your portfolio a margin of safety.
If you are spending only 70% or 80% of your true potential, you have more room to adjust spending when a financial crisis or a wave of inflation hits your assets. Unlike many seniors, if you live below your means you don’t have to cut back on your spending or adjust your lifestyle during a recession.
Finally, ‘looking poor’ gives you peace of mind.
Nearly one-third (33%) of adults over the age of 50 expressed feelings of worry about money, according to the University of Michigan’s National Survey on Healthy Aging conducted in 2024 (3).
Fear of running out of money in retirement or making uncomfortable sacrifices to make ends meet keeps many seniors up at night. Living below your means reduces this risk somewhat and can help you sleep better at night.
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Living at or above your means, especially in retirement, is risky.
If you’re reluctant to cut expenses to avoid looking poor, you’re more likely to plug the gap with debt.
Before you know it, you’re in your 70s and carrying outside personal loans and auto loan balances just to show off and impress your neighbors.
Senior debt is a growing problem, as highlighted by the AARP (4). Between 1992 and 2022, households headed by someone between the ages of 65 and 74 quadrupled their average debt burden. About 65% of people over the age of 65 consider debt a serious problem.
In fact, interest payments are a real risk when your income is fixed and flexible.
If you think you’re spending too much or borrowing too much, it might be a good idea to take a closer look at your budget and cut out anything frivolous or unnecessary.
Consider downsizing to save on home repair costs.
A rented apartment may not be impressive to your friends, but it is very healthy for your finances.
Similarly, you can follow a strict rule of thumb to keep spending on travel and vacations within a certain proportion of your income. For example, try not to spend more than 20% of your income on car payments or more than 10% on annual vacations.
Work with a financial advisor to see how much you can actually spend in retirement and try to spend a little less than that to create a sustainable margin of safety.
Consistently living within your means will make your retirement much safer and more enjoyable in the long run.
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We rely only on vetted sources and reliable third-party reporting. For details, see our editorial ethics and guidelines.
LendingTree (1); Federal Trade Commission (2); Institute for Health Care Policy and Innovation (3); AARP (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
