Baby boomers might be the generation that others love to hate — or at least resent — but people forget that boomers came of age during tumultuous times of their own. Going from flower children to embracing ’80s excess before finding themselves befuddled by grunge and all the genuinely bizarre slang of the next generations (“bae” or “skibidi” just don’t hit the way “groovy” did) wasn’t easy.
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With all of those changes, they’ve had to make strategic money moves to keep up with the times and prepare for their golden years. However, that’s not to say those moves have been flawless. Baby boomers have made their own share of mistakes and adopted some bad habits along the way — and those habits are costing them. Here are three financial habits that are making boomers go broke.
Becoming Too Set in Their Ways
When National Debt Relief examined the different money mindsets among generations, they found that baby boomers were the least likely to believe they make poor money decisions. Sure, other generations must snark about their stubbornness, but there are real pitfalls to thinking there’s no room to evolve in your savings strategy.
Being reluctant to change up your approach means missing out on opportunities, like moving money from a traditional checking or savings account to a high-yield savings account, or working with a trusted professional to optimize your investing strategy. Curiously, a significant segment of boomers — roughly 30% of those surveyed — told National Debt Relief that they felt they needed more information about building better financial habits.
In the absence of that information, baby boomers might be more likely to stick with what they know, even if that means over-relying on credit cards, skipping a budget entirely, or avoiding financial products like online banking tools that could help grow their wealth.
Trying To Help Adult Children
For all the flack boomers get about being a selfish generation, many are incredibly generous to their adult children and even their grandchildren — sometimes to their own detriment. Reporting from Savings.com shows that half of parents with adult children provide some sort of financial support to their kids. Among those, 83% contribute to their adult children’s groceries, 65% to cell phone bills, and 46% to vacations.
Worse, subsidizing their children’s “groovy lifestyles” (as Hannah Horvath’s mother famously said on the show “Girls,” during the scene where Hannah’s parents cut her off to fund their own retirement) has impacted boomers’ own financial security. Savings.com also found that nearly 50% of parents who support their adult children report a negative impact on their finances.
Hannah’s mom may have been on the right track, considering working parents who help their grown kids contribute more than twice as much to those children than they do their own retirement savings. As painful as it may be, setting financial boundaries with their adult kids could be one of the most loving — and fiscally responsible — things boomers can do.
Believing Conventional Retirement Accounts Are Enough
Boomers came of age in a time when Social Security, a 401(k), or a pension plan could promise a comfortable retirement. But today, between a volatile stock market, uncertainty around the future of Social Security, and pensions feeling like an endangered species, these once-reliable vehicles now need to be complemented by other retirement and savings tools, like Roth IRAs or brokerage accounts.
Boomers would also do well to ensure they have robust emergency funds, ideally parked in high-yield savings accounts. They should also consider additional protections like health savings accounts and long-term care insurance to cover expenses that Medicare won’t.
While many boomers know that life insurance can support loved ones after they’re gone, they might not be aware that certain permanent life insurance policies offer cash value components that could potentially be used to support retirement. Annuities, too, can be a powerful tool to create a steady income stream in retirement.
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Bottom Line
Baby boomers get a hard rap sometimes. But that doesn’t mean that they haven’t picked up a few bad money habits, like staying set in their ways, supporting adult kids to their own detriment, and not embracing the full range of financial products that can make a difference in their long-term security. Addressing these habits can help boomers course-correct and build a more secure financial future.
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This article originally appeared on GOBankingRates.com: 3 Money Habits Boomers Think Are Normal but Are Keeping Them Broke