{"id":291285,"date":"2025-07-25T18:43:16","date_gmt":"2025-07-25T18:43:16","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/291285\/"},"modified":"2025-07-25T18:43:16","modified_gmt":"2025-07-25T18:43:16","slug":"5-worst-money-habits-of-boomers-and-what-to-do-instead","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/291285\/","title":{"rendered":"5 Worst Money Habits of Boomers \u2014 and What To Do Instead"},"content":{"rendered":"\n

Even in retirement<\/a>, bad money habits can cost more than people realize.\u00a0<\/strong>While many baby boomers worked hard and saved diligently, some outdated or overlooked financial behaviors could quietly erode their long-term security.<\/p>\n

Read Next: 6 Mistakes Boomers Are Making With Their Money in the Trump Economy<\/a><\/strong><\/p>\n

Learn More: 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses<\/a><\/strong><\/p>\n

From clinging to the wrong assets to underestimating healthcare costs, here are five of the worst money habits boomers should break \u2014 and what to do instead<\/a>.<\/p>\n

Keeping 70% to 80% of retirement savings in low-yield accounts, such as certificates of deposit (CDs)<\/a> or cash, can severely limit long-term income, especially when inflation outpaces returns.<\/p>\n

\u201cI\u2019ve seen retirees with close to a million in CDs earning $30,000 annually when a balanced and well-diversified portfolio could generate $100,000 without touching the principal,\u201d said Liam Hunt, director of research at IncomeInsider.org<\/a>.<\/p>\n<\/p>\n

Hunt said boomers often equate conservative investing with safety, but in a low-rate, high-inflation environment, playing it too safe can actually shrink their purchasing power and undermine long-term financial security.<\/p>\n

\u201cI recommend rebalancing portfolios to a safe 40% to 50% allocation in stocks, even in retirement,\u201d Hunt said. \u201cLongevity risk is a far greater concern for boomers than market risks.\u201d<\/p>\n

Check Out: 6 Cash-Flow Mistakes Boomers Are Making With Their Retirement Savings<\/a><\/strong><\/p>\n

For boomers with limited retirement savings, home equity often represents their largest source of wealth. However, boomers tend to tap their home equity<\/a> for big expenses, such as a child\u2019s college tuition or a second home, which can harm financial stability.<\/p>\n

Robert R. Johnson, Ph.D., a finance professor at the Heider College of Business<\/a> at Creighton University, said boomers can protect their home equity by regularly following a simple investment strategy.<\/p>\n

\u201cPeople should invest in a low-fee, diversified equity index fund and continue to invest consistently whether the market is up, down or sideways,\u201d Johnson said. \u201cDollar-cost averaging into an index mutual fund or ETF (that mimics a benchmark index like the S&P 500) is a terrific lifelong strategy.\u201d<\/p>\n

Many boomers rely solely on tax-deferred accounts, such as traditional IRAs or 401(k)s, unaware of the future tax burden that can result from required minimum distributions (RMDs)<\/a>.<\/p>\n

D\u2019Andre Clayton, co-founder of Clayton Financial Solutions<\/a>, said boomers should shift from simply delaying taxes to making strategic tax moves in retirement.<\/p>\n

Story Continues <\/p>\n

\u201cSwitch from tax deferral to tax precision,\u201d Clayton said. \u201cPrioritize Roth conversions as soon as possible to insulate yourself from RMD exposure as best you can.\u201d<\/p>\n

Many boomers make the costly mistake of underestimating how much they\u2019ll spend on healthcare in retirement<\/a>. Without proper planning, rising medical expenses can erode savings, increase debt risk and compromise long-term financial security.<\/p>\n

According to Whitney Stidom of eHealth<\/a>, an online insurance marketplace, the lack of preparation often leads to costly missteps, especially when navigating Medicare. One of the most common and expensive mistakes is choosing the wrong prescription drug plan.<\/p>\n

With dozens of Medicare Advantage options available in many areas, it\u2019s easy to pick one that doesn\u2019t align with specific health needs, resulting in subpar coverage and higher out-of-pocket costs. Medicare plan benefits and personal prescription needs can both change annually, making regular plan reviews essential.<\/p>\n

\u201cPeople should take advantage of Medicare\u2019s Annual Enrollment Period (Oct. 15 to Dec. 7) to review their coverage options and needs,\u201d Stidom said. \u201cFor help, a licensed agent can help people understand which plans might save them money and still meet their coverage needs.\u201d<\/p>\n

Even with a solid estate or financial plan<\/a>, failing to maintain an up-to-date, centralized record of assets, accounts and ongoing expenses can create costly confusion.<\/p>\n

\u201cAll assets, wealth and even ongoing expense details should be documented so it is available for family when they would need it,\u201d said Pravat Lall of SmartHeritance<\/a>. \u201cNo matter what estate plans are in place, none of that would matter if there were not a centralized and up-to-date list of details available.\u201d<\/p>\n

More From GOBankingRates<\/strong><\/p>\n

This article originally appeared on GOBankingRates.com<\/a>: 5 Worst Money Habits of Boomers \u2014 and What To Do Instead<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Even in retirement, bad money habits can cost more than people realize.\u00a0While many baby boomers worked hard and…\n","protected":false},"author":2,"featured_media":291286,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[17394,51,474,108365,108366,2499,3397,16,15],"class_list":{"0":"post-291285","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-baby-boomers","9":"tag-business","10":"tag-finance","11":"tag-liam-hunt","12":"tag-money-habits","13":"tag-personal-finance","14":"tag-retirement-savings","15":"tag-uk","16":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114915351182725512","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/291285","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=291285"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/291285\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/291286"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=291285"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=291285"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=291285"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}