7 Things Financial Advisors Are Begging People Over 50 to Stop Doing
There's a saying, "Your health is your wealth." We're certainly not here to argue against the idea that your physical and mental health are worth their weight in gold, especially as you join the 50+ club and start thinking about retirement, as well as your risks for chronic disease going up. Feeling happier and healthier can help you enjoy life to the fullest at any age. However, don't discount the role your financial health—your literal wealth—can play. Money isn't everything and may not be able to buy happiness, but let's be pragmatic: it matters, including for your physical health—someone has to pay the doctor, right?
"Understanding your financial health is critical to building financial security over your lifetime," says Elizabeth Ayoola, a NerdWallet expert. "Financial health can also help bridge the gap between where you are and where you want to be financially. It can be more difficult to earn money during retirement, so it’s important to maximize your working years, especially during your 50s."
There are a few habits that can have you seeing red on your bank statements, and who wants that? Here, financial advisors offer golden advice on the things they want people over 50 to stop doing ASAP.
Related: 'What Happened When I Did a No-Spend Challenge After Spending Over $7k on Amazon Last Year'
7 Things Financial Advisors Wish People Over 50 Would Stop Doing
1. Waiting too long to create a retirement plan
You may have big dreams of handing in your laptop and walking out of the workforce once and for all. After a long career, it's certainly well-deserved. However, planning ahead does matter. If you hope to retire at 65, you'll definitely want to start in your 50s (if you haven't already).
"A well-designed retirement plan should start 10 to 15 years before your desired retirement date, not one to two years beforehand," explains Jason Dall’Acqua, CFP, the founder of Crest Wealth Advisors. "Doing so gives you time to adjust your savings, investments [and] budget...to create the retirement you desire, not be forced into a situation that you didn’t plan on."
Real talk: "Failing to plan is planning to fail," Dall’Acqua says.
2. Overlooking the ability to make catch-up contributions to your 401k or IRA
Feeling like you dropped the ball on retirement savings? You may be able to rally.
"Starting at age 50, you are able to contribute higher amounts to each of these accounts," Dall’Acqua says. "These increased contributions will go a long way in boosting your assets available in retirement."
3. Putting any applicable kids first
This one may be unpopular, but each financial advisor we spoke with brought it up empathetically yet emphatically.
"It is sometimes a knee-jerk reaction for parents to help their adult children when they’re experiencing financial challenges," Ayoola says. "However, for adults in their 50s, this noble act could set back retirement savings if caution isn’t taken."
Notably, people in their 50s may be getting ready to send older children off to college. While it's natural to want to go into debt to send the to their dream school, one financial advisor is ringing the alarm and begging people to re-consider.
"I've seen too many parents jeopardize their own retirement trying to protect their kids from student loan debt," warns Jeff Rose, CFP, the founder of GoodFinancialCents.com. "Instead, focus on ensuring your retirement is secure, as there are loans for education but not for retirement."
You may not have it in you to say no to helping a child with a financial hardship or college college. However, you don't necessarily have to.
"Consider budgeting a set amount for helping kids so you have an adequate amount to channel towards building strong retirement savings," Ayoola suggests. "This can help reduce the risk of outliving your savings and having to go back to work or living in financial insecurity during retirement."
4. Giving into the lifestyle creep
So, you had junior pick a good—but practically-priced—school, and now you're an empty nester. It's bittersweet, but the sweet side is that you're free as a bird and have more disposable income now that your kids and their friends aren't in your home, eating all your snacks and having you head to Trader Joe's three times per week to restock the pantry. Oh, and your recent raise helps. Ayoola is pleading with you not to give into what she calls, "the lifestyle creep."
"'The lifestyle creep' happens when your spending on non-essentials increases as your income improves," Ayoola says. "It’s important to remember the implications of this when you’re in your 50s, since retirement is edging closer. It may prove harder to simply earn more money to pay for your increased cost of living when you’re a few years away from hanging up your working."
5. Withdrawing retirement savings too
One severe lifestyle creep pitfall is the temptation—or need—to dip into retirement savings.
"At this age, we tend to start having urges to grab at money, as our kids leave the house, and we have more freedom with our finances," says Gina McKague, the owner and founder of McKague Financial. "However, withdrawing retirement savings too early can lead to penalties such as a 10% IRS penalty, along with regular federal income tax."
Instead, McKague recommends keeping these funds out of sight and out of mind—and leaving them out of your wallet.
6. Disregarding healthcare expenses
Remember how we talked about financial health being important to physical health? Here's why.
"Anyone approaching retirement, or even starting to think about retirement, should take healthcare expenses into consideration," McKague says. "Healthcare expenses find their way into our wallets one way or another and the best way to maintain them is to stay informed. Don’t dig into funds set aside, even if you think you won’t need them, the time will likely come and it's never bad to remain prepared."
Long-term care insurance is also worth looking into now, especially because rates can go up as a person ages.
"While we can’t predict what our health status will be as we age, it may be beneficial to consider the financial implications of long-term care if our health declines," Ayoola shares. "Exploring long term care options may be a way to ensure that unexpected health conditions don’t threaten your retirement savings and you receive adequate care when the need arises."
7. Not paying attention to scams
There are some seriously bad actors out there, and they target older adults. The FBI reported that scams targeting people in the 60+ club were responsible for $3.4 billion—with a B—in losses in 2023, an 11% uptick from 2022.
Scams targeting individuals aged 60 and older caused over $3.4 billion in losses in 2023—an increase of approximately 11% from the year prior. The average victim of elder fraud lost $33,915 due to these crimes in 2023
"Scams continue to evolve and get more sophisticated over time," Ayoola says. "People 50 and over should stay up-to-date with the latest scams and take extra precautions to prevent them."
Ayoola says you can do this by:
Double-chcking email sources
Verifying links before clicking
Double-checking with institutions, like your bank, before making money transfers or sharing sensitive informatiom
"After working for decades to save money for retirement, it’s important to shield the funds you’ve put so much effort into saving," Ayoola says.
Related: Is It Better To Save Up for Retirement or Pay Off Debt? Financial Pros Weigh In
The #1 Tip Financial Advisors Have for People Over 50
Don't be afraid to ask for help.
"If sitting down to analyze your financial situation seems overwhelming or you don’t feel confident in your ability to create a plan for the future, then seek out professional assistance," Dall’Acqua says. "A financial advisor can help you understand what is currently working well, where there is room for improvement and the best strategy to move you closer to your specific goals."
Rose agrees that it's important to have a solid retirement plan vetted by a professional. This plan should include:
A detailed budget
Retirement account approach
Healthcare costs strategy
“Having a clear plan helps you maintain your lifestyle and be ready for any surprises," Rose says. "Plus, it gives you peace of mind knowing you're prepared for the future."
Peace of mind? Now that's priceless.
Next: Doing This One Thing on a Monthly Basis Could Help You Live 10 Years Longer, According to Research
Sources
Elizabeth Ayoola, a NerdWallet expert
Jason Dall’Acqua, CFP, the founder of Crest Wealth Advisors
Jeff Rose, CFP, the founder of GoodFinancialCents.com
Gina McKague, the owner and founder of McKague Financial
Elder Fraud, in Focus. FBI.
