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There is plenty you can do to avoid running out of money in retirement. Planning is the key.

Some retirees just plunge in. More often than not, that gets them into trouble.

Following are eight money mistakes people nearing retirement make, and how to avoid such foibles so they don’t crack your nest egg.

Mistake 1: Not Planning for Medical Expenses

Medicare kicks in at age 65, but that’s not the end of your medical expenses. Fidelity Benefits Consulting estimates a 65-year-old couple who retired in 2014 will need $220,000 of their own money for medical expenses over the course of retirement. Such costs include deductibles for Medicare Part A and Part B (inpatient and outpatient insurance) and premiums and out-of-pocket costs for Medicare Part D prescription drug coverage.

Take action:

  • Read The ABCs of Selecting a Medicare Supplement Plan, then, if you have further questions, call your state insurance commissioner’s office to get help choosing the most cost-effective Medigap plan.
  • To help dodge expenses from illness and disability, exercise regularly and stay at a healthy weight. (Get a physical exam before beginning a diet or exercise program.)
  • Check into long-term-care insurance. It’s cheaper if you sign up when you’re younger.
  • Think about moving closer to good medical centers, hospitals and family.

Mistake 2: Underestimating Costs

Retirement costs can be surprising — surprisingly high, that is. You can manage costs by earning extra income in retirement. On its website, the Social Security Administration offers rules for working while receiving Social Security benefits.

Today, numerous employers offer home-based jobs. But the field is rife with scammers, so learn the red flags.

Take action: Start shopping for jobs.

Mistake 3: Celebrating With a Big Purchase

No doubt you’ve got a wish list for retirement. But hold off on making major purchases at first. Instead, give retirement a spin and see what you’re spending each month.

Track expenses – every single one. A year’s tracking gives the best picture because it includes one-time and seasonal expenses.

Take action: It doesn’t matter what tracking system you use. Just find one you like and keep it up. Keep receipts, watch bank and credit card accounts online on a weekly basis, and update your tracking regularly. Here are a few approaches:

  • Try free online budget programs. Money Talks News partner PowerWallet lets you track expenses automatically for free. It and other free money management services like Mint and BudgetTracker make money by recommending financial products and supplying coupons.
  • Pay for a program such as Quicken.
  • Do-it-yourself. Track expenditures manually and offline on a spreadsheet.

Mistake 4: Helping out Adult Kids

Many parents set themselves up for a crisis in retirement by supporting adult children financially. A study by Merrill Lynch says 60% of people 50 and older are assisting adult relatives financially.

If you are a parent who gives money to an adult child, remember the following: Adult children still have time to pay off college loans and save for retirement. Their parents — in other words, you — are running out of time to save for the golden years ahead.

Take action:

  • Make a concrete plan with goals and deadlines for gradually withdrawing financial help from your kids.
  • Discuss the changes with your kids and help them learn to budget.
  • Model financial restraint and responsibility for your kids.

Mistake 5: Claiming Social Security Too Soon

Waiting to claim Social Security benefits is one of the best investments around. If your full retirement age is somewhere between 66 and 67, your benefit check could grow by 32% if you wait until age 70 to collect, Social Security spokesman Michael Webb said in an email. If your full retirement age is 67, waiting until 70 yields a maximum possible increase of 24%.

The average benefit Social Security pays is $1,294 — $2,111 for a couple. If your full retirement age is 66, waiting until 70 would grow a $1,294 benefit to $1,708 a month for life. For couples, if both spouses wait to 70, the $2,111 average combined benefit can grow to $2,787 a month.

On the other hand, about half of retirees take Social Security at the earliest possible moment — when they’re 62. U.S. News & World Report says:

Social Security benefits are reduced for workers who sign up at age 62, and the amount of the reduction has recently increased from 20 percent for people born in 1937 or earlier to 25 percent for baby boomers born between 1943 and 1954. … The reduction in benefits for people claiming at age 62 will further increase to 30 percent for everyone born in 1960 or later under current law.

This Social Security Administration table shows the reduction for taking early Social Security benefits depending on the year you were born.

Take action: 

  • Go to SocialSecurity.gov’s My Account to see your estimated benefits. If you’ve paid into the Social Security system, you can create an account and pull up a statement showing what you’ll earn by claiming benefits at various ages.
  • Keep your current job if you can and delay retirement. Or get a part-time job that helps you hang on longer before claiming benefits.
  • Hire a Certified Financial Planner to review your retirement plan, income and expenses with you.

Mistake 6: Forgetting to Plan for Taxes

The IRS probably won’t disappear from your life when you retire.

For instance, traditional tax-deferred retirement plans like 401(k)s and IRAs require you to withdraw a minimum amount each year beginning in the year you turn 70½. If you don’t, you could be hit with a big penalty.

You can read more about required distributions at this page of the IRS website.

​Good planning, especially before retirement, can help manage the tax bite. One strategy, Stacy Johnson says, is to roll a portion of retirement savings into a Roth retirement plan, which has no minimum distribution requirements. Roth plans require taxes to be paid before money goes in. You withdraw the funds tax-free later. The strategies you use will depend on your income now and what you expect it to be after retirement.

Take action: Make a plan — or get expert help making one — that takes taxable retirement income into account.

Mistake 7: Ignoring Estate Planning

Get your affairs in order before you’re ill or old so you’ll have control over where your money and possessions go. It’s a kindness to your heirs, too, because they won’t be saddled with the work.

Take action: 

  • Make or update your will and, if appropriate, make a revocable living trust.
  • Sign a durable power of attorney naming someone you trust to make your legal and financial decisions if you cannot.
  • Assign health care power of attorney to someone to make your medical decisions if you’re unable.

Mistake 8: Investing Too Conservatively

As retirement grows nearer, it seems prudent to invest more conservatively. But you could live another 20 years. Savings held too conservatively shrink because of inflation. A portion of your funds needs to grow.

“Never taking risk means taking a different risk,” Johnson says.

Take action: Learn about investing so you can be confident in taking measured risks to earn gains, even as you grow older.

This post originally appeared on Money Talks News.

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