Baby Boomers are either already retired or have just a few more years until they can collect Social Security, but many of them are woefully unprepared: Several studies have found that almost half of baby boomers have not saved anything for retirement, and many others have not saved enough either.
check out: 5 ways to improve your everyday finances
learn: How to get cash back on everyday purchases
And of course there are some really wealthy people.
Although affluent baby boomers are people who spend their money in many different ways and on many different things, they tend to have a lot in common when it comes to the ways they refuse to spend money.
GOBankingRates spoke with several financial experts who work with Baby Boomer millionaires and found that many of them agree that no matter how different their backgrounds and mindsets may be, there are some wasteful ways they would never waste money.
A flashy, expensive, depreciating asset
The reason that wealthy Baby Boomers are still not wealthy at their age is because they spent their lives squandering money advertising their wealth.
“My affluent Baby Boomer clients generally avoid unnecessary expenses, such as luxuries that don't offer long-term value,” said Rory Donadio, CEO of Tribeca Capital Group. “They prioritize spending on experiences over material possessions, and they value travel and time with family over the latest gadgets and luxury cars.”
How to go from broke in your 40s to millionaire in your 50s: 8 'Slow Start' Retirement Tips
Small items, ornaments, decorations, etc.
It's not uncommon for people of all ages to have walls, dressers, counters, and tables cluttered with decorative items that may have sentimental value but no actual monetary value.
So it is with older Americans — except for the most financially successful ones, for whom the decorative items that beautify their living spaces serve a dual role as investments, inflation hedges and future legacies for their heirs.
“Affluent baby boomers are more likely to engage in art collecting than to accumulate possessions,” said John Browning, a 30-year Wall Street veteran, founder and CEO of Guardian Rock Wealth and author of “Build a Life, Not a Portfolio: A Values-Based Guide to the Future of Finance.”
“They value quality over quantity and invest in unique artworks, vintage pieces and limited edition collectibles,” Browning says. “Not only is this a form of enjoyment, it also becomes part of the value of their property and contributes to a legacy of craftsmanship and cultural appreciation.”
A luxurious retirement is not realistic
Baby Boomers are retired or nearing retirement, and Browning has seen many of them spend money lavishly on their dream retirement, regardless of whether they will be able to achieve that dream in the long run. However, the wealthy generation is more likely to choose a lower-cost quality of life in society over retirement luxuries.
“Instead of choosing lavish retirement living, affluent baby boomers are exploring community-driven models,” he said. “They are investing in retirement communities that prioritize shared values, experiences and activities. This intentional focus on community fosters social connections and mutual support, creating a fulfilling retirement lifestyle that goes beyond individual luxury.”
Highly taxed investments
Many wealthy baby boomers made their fortunes through investments, and while they're not averse to calculated risk, they didn't get rich by chasing profits without considering the IRS's interest in those returns.
“Affluent Baby Boomers are adept at taking advantage of tax-efficient investment strategies,” Browning says. “They carefully allocate their assets across a variety of tax-advantaged accounts and take advantage of opportunities such as Roth conversions and tax-efficient withdrawal sequences. This careful tax planning improves overall financial efficiency and results in a more tax-robust retirement strategy.”
Credit card fees
Like nearly all wealthy people, wealthy Baby Boomers avoid revolving credit cards at all costs.
“Affluent baby boomer clients are spending wisely by avoiding high-interest debt,” says Rob Whaley, a financial expert at Horizon Finance Group. “They know that taking on credit card debt means paying more in interest, and that's not a good idea.”
However, if you use it as a tool to improve your finances, credit cards can be a great deal.
Wealthy people almost always incorporate credit cards into their overall financial strategy, but they rarely pay finance fees and therefore focus on rewards rather than interest rates.
Millionaires are less likely to have cash back cards, but they are much more likely to have travel rewards cards, balance transfer cards, gas and grocery cards, 0% APR cards, and brand- or store-specific cards.
Wealthy Baby Boomers rarely use credit cards to splurge on things they can't afford, but they use them to build wealth and improve their lifestyle for free by using them to:
-
Fraud Prevention and Security
-
Supplemental Insurance
-
Send money abroad easily and securely
-
Special access to events
-
Travel perks like airport lounge access, priority boarding, free Global Entry and TSA PreCheck
-
Concierge Service
-
Hotel Room Upgrades
-
Rideshare and car rental credits
“This approach shows they are becoming financially literate with lifelong money lessons that help them preserve and grow their wealth,” Whaley said. “They are keeping their money safe by making thoughtful financial choices and avoiding unnecessary interest costs.”
More from GOBankingRates
This article originally appeared on GOBankingRates.com: 5 Things Wealthy Baby Boomers Never Waste Money On
