The other day at the bike shop, I got to talking with an 80-year-old guy who was paying to have a tire changed. He seemed almost embarrassed about it — like handing off a job he’d done his whole life was some kind of defeat.
I get it. I’ve changed many a bicycle tire in the decades I’ve been riding. But I was also at the bike shop getting an adjustment I’d have done myself years ago.
I’ll tell you what I told him. “This is exactly why we worked our tails off for all those years: so when times get tough, the tough can keep going.”
That’s not a failure of frugality. It’s the whole point of it.
I’ve been a CPA since 1981, spent a decade as a Wall Street advisor, and fixed up more real estate than I can remember. But I’m also 70 — and although it can still go against the grain sometimes, I’m not afraid to use my savings in ways I wouldn’t have dreamed of years ago.
One thing before we start. Plenty of folks do their own handyman stuff because they truly enjoy the work, and good for them. Others do it because hiring help just isn’t in the budget: I understand.
This isn’t about spending for its own sake. It’s about being penny wise and pound foolish. It’s about the specific times being cheap can easily end up costing you more than it saves, in terms of both money and quality of life.
Here are five things I see hit retirees the hardest.
1. Doing your own taxes in a landmark year
Tax software is fine for a simple year. But retirement is full of years that aren’t simple, and those are exactly the ones where a few hundred bucks for a good preparer saves you thousands.
I’ll let you in on something. I’ve been a CPA for 45 years, and when a genuinely complicated year lands in my lap, I’ll hire another set of expert eyes. Pride is expensive at tax time, and I don’t mind paying someone who spends all day, every day tackling tax problems while I’m writing articles like this one.
Think about the big triggers: your first required minimum distribution, a Roth conversion, selling the house, or the year a spouse dies and your filing status flips to single. Each one hides traps software won’t flag.
Sell your home, and the IRS lets you shield up to $250,000 in profit from tax — or up to $500,000 for a couple. Fumble those rules, or botch the timing of a conversion, and the bill can run five figures.
There’s a long list of tax breaks retirees miss that a pro catches and a rushed return doesn’t.
2. Skipping an umbrella insurance policy
This one’s almost comical when you run the math. An umbrella liability policy adds $1 million or more of protection on top of your home and auto coverage. It typically costs just $150 to $300 a year, according to the Insurance Information Institute.
Now picture the downside. You’re at fault in a highway pileup, or someone slips on your icy driveway and sues. Your auto or home policy caps out — and everything above that limit is fair game. Your savings. Your investments. Maybe your house.
In retirement you’re asset-rich, and that makes you a target. Skipping a policy that costs less than a streaming bundle, to protect a lifetime of savings, isn’t thrifty. It’s a gamble with terrible odds.
3. Going cheap on the things you use every single day
Some purchases are easy to lowball — until you remember you’ll use them every day for the next 20 or 30 years. Hearing aids. Eyeglasses. A mattress. Supportive shoes.
I wear hearing aids that cost about $2,000. Was I tempted by the bargain versions? You bet. I’ve been writing about saving money for so long that it’s in my DNA to spend as little as possible. That’s why I have the savings I have.
But this is my life we’re talking about.
Researchers at Johns Hopkins found that even mild, untreated hearing loss makes an older adult nearly three times as likely to have a history of falling. And falls are no small thing.
Personally, I’m not afraid of falling, but I can tell you that when you can’t hear and thus don’t participate in conversations, it’s isolating, it’s stressful, it’s depressing and it’s not necessary.
One thing before we keep going — the financial world is louder and dumber than ever. Hot takes everywhere. Almost none of it is worth your time. I’ve spent 35+ years cutting through the noise so you don’t have to. Sign up for the free Money Talks Newsletter — 10 seconds, no spam, just the stuff that matters.
4. Refusing to pay for help around the house
For most of my life, I was the guy who did everything himself. I can’t build a house from scratch, but I’ve fixed up plenty of them. These days, I hire out chores I used to scoff at paying for, like hanging a ceiling fan, installing a dishwasher or painting the fascia.
My back and my safety are worth more than my pride. Plus, I simply don’t enjoy stuff like that as much as I used to.
Climbing a ladder to save $150 on gutter cleaning is a lousy trade when one fall can end in a broken hip. Nearly 319,000 older Americans are hospitalized for hip fractures every year, and the overwhelming majority of those breaks come from falls, per the Centers for Disease Control and Prevention.
A hip fracture can mean surgery, weeks of rehab, and sometimes a permanent move to assisted living that runs thousands a month. Suddenly that $150 you “saved” looks awfully expensive. If you can afford the help, pay for it.
5. Deferring maintenance on your biggest asset
Your home is likely the biggest asset you own, and it punishes neglect. That small roof leak you ignore becomes rotted decking and a new roof. The furnace tune-up you skip becomes a dead furnace in January.
Deferred maintenance doesn’t save money. It delays the bill — and adds interest in the form of bigger damage. A $200 service call today routinely heads off a $5,000 emergency later.
Retirement is when a lot of folks let this slide, trying to squeak by on a fixed income. But housing is already one of the most underestimated costs in retirement — don’t make it worse by turning small fixes into big ones.
None of this is an argument to go blow your savings. It’s the opposite. Being smart with money in retirement sometimes means spending a little to protect a lot.
Here’s the one I’m wrestling with myself. I know the stock market cold — I’ve been investing in stocks for nearly 50 years. But my wife, who’s much younger than me, doesn’t know a thing about it. So, while I’m not doing it today, I’m considering bringing in an advisor we both trust. Not for my sake, but so there’s a steady, knowledgeable hand for her when I’m no longer around to provide it.
Paying for that isn’t me admitting I’ve lost a step. It’s love with a dollar sign in front of it.
When I do decide to get some expert investment advice, I’ll probably use SmartAsset to find it. They instantly match you with up to three fiduciary advisors — legally required to prioritize your interests. If you’ve got $100,000 or more in investments, check them out. It’s free.
Bottom line? The goal was never to die with the most money. The goal is to live well, stay independent and enjoy life as long as we can. Sometimes that costs a few bucks. Just like my friend at the bike shop, spend them — and keep going.
