This is a difficult article for me to write. After all, I’m not writing from a position of strength. Like many of the 1000s of baby boomer women I have talked to since starting Sixty and Me, I made all of the financial mistakes below.

The good news is that, if you are in your 50s or early 60s, there is still hope for you! You can learn from the mistakes that your “elders” made and build a solid foundation for your retirement.

Here are 4 financial mistakes that almost all empty nesters make and how to avoid them. Do you have any additional suggestions? Please add them in the comments section at the end of this article.

Mistake #1: Going on a Post-Kids Spending Spree

In films and on TV, going out and buying a red sports car is synonymous with having a mid-life crisis. But, you don’t need an emotional breakdown to let your spending out of control.

I have seen many otherwise rational couples let their finances go to hell in the years after their kids left the house. When I have asked them about their “investments” in holidays, new cars, golf club memberships and entertainment, they tell me things like:

“Why not? We looked after the kids for 20 years… now, this is our time.”

“I can’t take the money with me. I’d rather have a good time while I still can.”

“I’m already so close to retirement that saving a bit more won’t make a difference.”

“Why wait until I’m old and stiff to travel. I’d rather see the world while I can enjoy it.”

There are several fallacies at play here…

First, people in their 50s assume that life is short. It’s not! Trust me – and every other person over the age of 65 – when we say that LIFE IS LOOOONNNG! The decisions that you make now have a real impact on your life. Who wants to have a great time in their 50s only to spend their later years in poverty? Not me!

Second, many people overestimate the physical limitations that they will face in their 60s and 70s. Yes, we all have to deal with aches and pains. That’s just a normal part of life. But, on my travels, I’ve met 85-year-old professional dancers, 70-year-old skydivers and more swimmers, hikers, bikers and sailors than I can count.

Trust me. Unless you are unfortunate enough to experience a serious illness early in retirement, you are going to live for a long time. You may not want to hear it now, but, pace yourself!

Mistake #2: Not Downsizing Early Enough

About half of the retirees that I know chose to downsize in their mid-60s. On some level, this makes sense. After all, at age 65, you’re thinking about where you want to spend retirement. It’s a good forcing function for preparing for the decades ahead.

While downsizing is a positive exercise at any age, I’m convinced that most older adults could benefit from downsizing as soon as their kids leave the house. Let’s look at a few examples of how you might save by taking this approach. Of course, I’m not a financial professional, so, don’t rely on my math and always check with your own financial advisor before making any decisions.

Let’s say that you’re 50 and live in a 4-bedroom house that is worth $300,000. If you sold your house and moved to a smaller one in the same neighborhood for $200,000, you would end up with $100,000 in cash.

Investing this amount at 7% – the historical rate of return, after dividends and inflation for the S&P 500, would give you around $250,000 extra for retirement.

Yes, I know that investing all of your money in the stock market 15 years before retirement might not make sense for you. I also realize that the retirement age for getting full Social Security benefits is 66, not 65, but, you get the idea. My point here is that downsizing can free up cash that can fuel your retirement.

Another example is storage space. Do you have a storage unit, filled to the brim with stuff that was very important to you at some point? Canceling a $90 storage unit and reinvesting the money that you save each year at 7% could give you an extra $29,000 to work with in retirement. Not bad for a weekend’s work cleaning out your closets.

Mistake #3: Assuming That it’s Too Late to Invest

I have mixed feelings about the “invest for 40-years” advice that permeates the Internet. On the one hand, it’s true that the best time to invest is in your 20s. Heck, investing the money from your paper route or lemonade stand at age 7 is even better.

The problem for older adults is that it’s easy to feel like you’ve missed the boat. Because you don’t have 40 years of compound interest to look forward to, it’s easy to think that your money is better off spent than saved.

The simple truth is that compounding can still work in your favor, even if you are in your 50s. Once again, I’m not suggesting that you should put all of your money into the stock market. It’s just easy to work with stock market numbers for illustrative purposes. Although… if the money that you save really is “extra” maybe being a big more aggressive makes sense. After all, the alternative investment of taking a trip to the Caribbean has an ROI of exactly 0%.

If you could find a way to reduce your spending by $500 a month, you could save $6,000 a year. By investing (and reinvesting) this money at 7% you might give yourself as much as $150,000 extra to work with in retirement. Once again, investing in the stock market might seem reckless, but, maybe the potential for a higher return might actually get you off your butt and into the market.

Mistake #4: Not Saving Enough Skills for Retirement

In their 50s, most people look forward to retirement as a chance to stop working. It is the proverbial pot of gold at the end of the rainbow. Then, when they actually reach retirement age, or are forced to leave their corporate careers early, they find themselves wishing they still had a way to make money.

I firmly believe that every single older adult should plan to make money in retirement. Not only does being productive give you extra money to work with, but, it is also good for your body and soul.

Think about it. We all need to be needed. Unless you are wealthy enough to be able to fill your days with golf, travel and charitable work, you will want to have ways to contribute to society in retirement.

This is why I encourage all pre-retirees to think about saving skills, not just money.

What do I mean by “saving skills for retirement?” I mean that every older adult should think about starting a side business before they retire. This could be a consulting business. Or, they could plan on making money from freelancing, painting, teaching or one of their passions.

The transition to retirement shouldn’t take months. It should take years! If you are in your 50s now, you have a golden opportunity ahead of you. Talk to other people in your circle of friends who have already retired. Ask them what they wish they had done at your age. Chances are, you will hear many of the suggestions listed in this article… plus several more that I have missed!

What are you doing to make sure that you achieve financial security in retirement? Have you already retired? What advice would you give to the younger members of our community? Please join the conversation.

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