The financial playbook they grew up with is dangerously out of date.
The Baby Boomer generation was raised on a set of financial principles that served them well for decades: work hard, save diligently, and trust in established institutions. But in the fast-paced and complex economy of 2025, many of these deeply ingrained money habits are no longer just outdated; they are actively becoming a liability. The world has changed, but their financial strategies often have not.
This has left many facing a retirement that is far more precarious than they ever imagined.
1. They are keeping way too much money in cash.
After witnessing multiple stock market crashes, many Boomers have a deep-seated fear of risk, leading them to keep a huge portion of their nest egg in cash or low-yield savings accounts. While this feels safe, it’s actually a guaranteed way to lose money. With inflation consistently eroding the value of the dollar, that “safe” cash is losing its purchasing power every single day, as mentioned at Yahoo! Life. A strategy that was meant to preserve wealth is now silently destroying it, leaving them with less real money for their later years.
2. They show a blind loyalty to their long-time financial advisor.
Many Boomers have had the same financial advisor for decades and have built a relationship based on trust. This loyalty, however, can be costly. They are often hesitant to question the high fees they are paying or to seek a second opinion on their investment strategy. The financial industry has changed dramatically, and an old-school advisor might have them in expensive, underperforming mutual funds, as stated at Moneywise. Not shopping around for a modern, lower-fee advisor can cost them tens of thousands of dollars over the course of their retirement.
3. They are still holding onto a house that is too big and expensive.
The family home is a powerful emotional asset, but it can be a massive financial drain in retirement. Many Boomers are “house rich and cash poor,” living in a large home with a paid-off mortgage but struggling with the sky-high costs of property taxes, insurance, and maintenance. Here in California, property insurance costs alone are forcing many seniors into a financial corner, as per GWI. Their reluctance to downsize and unlock their home equity means their biggest asset is actually consuming their limited retirement income.
4. They often underestimate their own life expectancy.
The good news is that people are living longer than ever before. The bad news is that many Boomers’ retirement plans are still based on outdated assumptions about life expectancy. They may have a financial plan designed to last until they are 85, but it’s very likely that one or both spouses will live well into their 90s. This failure to plan for a 30-year-plus retirement is one of the biggest risks they face, creating a very real danger of outliving their money in their most vulnerable years.
5. They are providing endless financial support to their adult children.
The economic struggles of younger generations have turned many Boomer parents into a permanent family bank. They are depleting their own retirement funds to help their adult children with down payments, rent, or the high cost of raising grandchildren. While this generosity is well-intentioned, it was not factored into their retirement budget. This unplanned-for financial drain is a massive and growing problem, jeopardizing their own ability to live comfortably in retirement because they are propping up the next generation.
6. They often ignore the catastrophic cost of long-term care.
This is the single biggest unplanned expense that can completely wipe out a lifetime of savings. Medicare does not cover long-term care, such as a nursing home or an in-home health aide. Many Boomers have not purchased long-term care insurance and have no plan for how to pay for these services, which can easily cost over $100,000 per year. This “head in the sand” approach to long-term care planning is one of the most dangerous financial habits, leaving them and their families completely exposed to a potential financial catastrophe.
7. Their deep distrust of technology costs them money.
A reluctance to embrace modern financial technology is a costly habit. By insisting on only banking at a physical branch, they are missing out on the much higher interest rates offered by online savings accounts. By not using budgeting apps, they are failing to see where their money is actually going. By avoiding low-cost robo-advisors, they are often stuck paying much higher fees for investment management. Their distrust of the digital world is preventing them from using tools that could save them a significant amount of money.
8. They fall for “safe” but high-fee investment products.
As they approach retirement, many Boomers are looking to reduce their risk, which makes them a prime target for insurance agents and brokers selling complex, “safe” investment products like fixed-index annuities. While these products promise protection from market downturns, they often come with incredibly high, hidden fees, long surrender periods, and mediocre returns. This habit of chasing “safety” without understanding the fine print can lead them into products that primarily benefit the person who sold it to them, not their own retirement portfolio.
9. They stick with brand names out of habit.
The Boomer generation is often the most brand-loyal. They will stick with the same insurance company, the same grocery brands, and the same cell phone provider for decades out of simple habit and comfort. This loyalty, however, can be very expensive. In today’s competitive market, shopping around for a new car insurance policy or switching to a cheaper cell phone plan can save a household hundreds or even thousands of dollars a year. Their reluctance to comparison shop is a habit that directly costs them money.
10. Their political beliefs can dictate their investment strategy.
A very dangerous habit that has become more common is allowing political beliefs to drive investment decisions. Some Boomers will make drastic changes to their portfolio, like selling all their stocks, based on who is in the White House or what they are hearing on their preferred cable news channel. This is a form of market timing that almost always backfires. A successful long-term investment strategy should be based on your personal financial goals and risk tolerance, not on your feelings about the current political climate.
11. They are too trusting on the phone and online.
Unfortunately, seniors are the primary targets for financial scams. Their generational habit of being more polite and trusting on the phone makes them particularly vulnerable to the sophisticated and aggressive tactics used by modern scammers. They are more likely to fall for a “grandparent scam” or to be tricked by a fake tech support agent or a fraudulent investment opportunity. This inability to be immediately skeptical of an unsolicited offer can have devastating financial consequences, with many losing their entire life savings to a single scam.
12. They take a “set it and forget it” approach to retirement.
The old model of retirement planning was to simply let your pension and Social Security take care of you. In the modern, 401(k)-based world, retirement requires a much more active and engaged approach. Many Boomers are still in a “set it and forget it” mindset, failing to regularly review and rebalance their investment portfolios or to create a detailed withdrawal strategy for their retirement years. This passive approach can be very dangerous, as their portfolio may not be properly aligned with their needs in retirement, leaving them exposed to too much risk.