In your 60s and 70s, the goal should be to retire well, not impress your friends and family.

Unfortunately, it’s easy to forget this simple principle. Many retirees quietly sabotage their financial future just to keep up appearances.

Nearly 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 a critical part of ensuring a comfortable and sustainable retirement.

Living below your means and rejecting the social pressure to appear wealthy could offer structural advantages that compound over time.

Firstly, flaunting your wealth could put you at risk of attracting the wrong attention. Adults over the age of 60 were more likely than other age cohorts to report losses of $100,000 or more due to financial fraud, according to the Federal Trade Commission (2). Altogether, this group lost $81.5 billion in 2024 to fraudsters.

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.

Secondly, a modest lifestyle gives you a margin of safety in your portfolio.

If you’re only spending 70% or 80% of your actual capacity, you have more room to adjust spending when an economic crisis or wave of inflation hits your assets. Unlike many seniors, if you live below your means you don’t have to cut your spending or adjust your lifestyle during downturns.

Finally, ‘looking poor’ gives you peace of mind.

Roughly one-third (33%) of adults over the age of 50 expressed some feelings of anxiety over money concerns, according to the University of Michigan National Poll on Healthy Aging conducted in 2024 (3).

The 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 some of this risk and could 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 back spending 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 keep up appearances and impress your neighbors.

Senior debt is a growing problem, as highlighted by the AARP (4). Households headed by someone between the ages of 65 and 74 have quadrupled their average debt burden between 1992 and 2022. Nearly 65% of people over the age of 65 who have debt consider it a serious problem.

Indeed, the interest payments are a real risk when your income is fixed and inflexible.

If you think you’re overspending or borrowing too much, it may be a good idea to closely examine your budget and cut out anything frivolous or unnecessary.

Consider downsizing to save home maintenance costs.

A rental apartment may not be impressive to your friends, but it’s much healthier for your finances.

Similarly, you can follow a strict rule of thumb to keep spending on travel and vacations within a fixed ratio of your income. For instance, try not to spend more than 20% of your income on a car payment or more than 10% on an annual holiday.

Work with a financial adviser to see how much you can really afford to spend in retirement and try to spend slightly less than that to create a durable margin of safety.

Consistently living within your means will make your retirement much safer and more enjoyable over the long term.

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LendingTree (1); Federal Trade Commission (2); Institute for Healthcare Policy & Innovation (3); AARP (4)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.