At some point, you may choose to wave goodbye to the working world by hitting the retirement button. Assuming you’ve planned properly, the goal is almost always to retire with a comfortable nest egg. Generally, though, retirement means shifting to a fixed income drawn from retirement accounts or Social Security (or both, depending on your situation).

Unless you have plans to work part time during your retirement years, you will likely need to take a wide view of your spending habits. You may need to either properly budget for the activities you want to enjoy or cut out some activities to help maintain both financial and physical health.

Unhealthy Spending Habits 

They say one man’s trash is another man’s treasure. This concept also applies to defining good and bad habits. One spending habit that you may think is perfectly acceptable could be a habit that someone else (say, a financial advisor) would call a particularly bad way to spend your money, especially if you’re on a fixed retirement income.

Having bad spending habits is common among Americans. Prior to the pandemic, for example, it was reported that Americans were spending an average of nearly $18,000 per year on nonessentials, including:

• Dinner at restaurants (~$209/month)
• Alcoholic drinks (~$189/month)
• Takeout or delivery (~$178/month)
• Buying lunch (~$174/month)
• Impulse purchases (~$109/month)

Americans were even spending an average of $22 per month on music streaming services and over $17 per month on bottled water, according to the report.

The pandemic forced numerous changes in spending habits — not all of them were good.

A majority of Americans (61%) are now attempting to break the unhealthy habits they developed during the pandemic, including excessive screen time and poor eating habits.

Given the above, unhealthy spending habits could fit into one of two categories:

1. Habits that are literally bad for your health, such as excessive alcohol consumption;
2. Habits that are bad for your budget, such as buying all of your coffee at Starbucks instead of brewing some at home.

These two categories are often interrelated. Physically unhealthy habits are often habits that you commit more money toward.

Meanwhile, habits that are bad for your budget may cause stress, potentially leading you to develop habits that are bad for your health.

Three Financial Habits to Kick Now

Don’t worry. This is not advice to hole up in your house and be a retirement miser. Retirement should be fun, and you should be able to continue to enjoy different activities. However, retirement does come with the reality of having limited resources as well as slowly declining health into your golden years.

Strong and healthy finances are required to ensure you can take care of yourself.

If you want to reduce the risk of burning through your fixed retirement income, try to avoid these bad habits.

1.) When It comes to Insurance: Don't 'Cheap Out' 

Now is not the time to accept the cheapest insurance plan and walk away, assuming you’re covered. Take a good, realistic look at the insurance policies you carry to ensure that your coverage selections cover your specific needs.

You might not think it's worthwhile to have life insurance, but going without coverage could be risky. The decision may not directly impact you, but it could have significant ramifications for your loved ones, especially if your savings won't be enough to cover medical bills or funeral expenses.

Do your research now to determine whether a term life insurance policy is realistic. There are several ways to research your options — through financial advisors, family, friends and the Internet.

2.)  Do Not Spend Cash Windfalls Aimlessly

From your tax returns to an inheritance, it’s easy to spend unexpected cash on an extravagant purchase. After all, it’s found money, right?

However, those funds could be better used for essential items to help lighten the load, or you could choose to put funds toward investments for your future.

First, dedicate money for essentials (mortgage, utilities, health care, etc.), and then create a budget for fun activities.

3.) Pretend You Still Have Lots of Time Left — To Save

By the time you actually find yourself in retirement, your income may be reduced and you still could have as long as 15 to 20 years — or more — to live.

Consider working part time during retirement. However, if you do decide to continue to work, full- or part-time, you need to know that the Social Security Administration (SSA) has income limits for older Americans who choose to work while also receiving retirement benefits before reaching full retirement age.

The SSA will deduct money from the benefits you receive if you earn beyond the income limits.

Once you reach full retirement age, which, this year, is 66 and 10 months, you won’t be penalized for working during retirement. You can be confident that you will receive your full benefits regardless of how much you work.

The Bottom Line . . .

Ideally, you will have enough money available in your retirement accounts so that you can easily enjoy your favorite activities without fear of running out of money before you pass away. But life can be unpredictable.

Budget for the retirement you want, and consider reducing or cutting out some habits that are costly to your finances and health. You can also consider purchasing a life insurance policy that will take care of your loved ones after you pass.

Maxime Rieman is Product Manager at ValuePenguin. Educating and assisting shoppers about financial products has been Rieman's focus, which led her to joining ValuePenguin, a consumer research and advice company based in New York. Previously, she was product marketing director at CoverWallet and launched the personal insurance team at NerdWallet.