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12 Ways 50-Year-Olds Ruin Their Finances

Avoid these potential mistakes that could push your financial plans off the rails.

senior couple reading documents
Updated Sept. 24, 2024
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A lot is riding on how you handle money during your 50s. In this period before retirement, the right moves could provide you with a financially stable future.

However, financial missteps during this time of life could threaten to tarnish your golden years.

Here are some common money pitfalls to avoid in your 50s if you want to continue to build wealth.

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Having no retirement plan

Rido/Adobe couple discussing home economics

Retirement might seem like a far-off dream. But if you are in your 50s, the reality is that the end of work is likely approaching fast. You need to start planning for retirement.

Without any type of retirement plan in place, it’s easy to get thrown off course.

Correct the situation by mapping out a retirement plan for your funds. Determine how much you need to achieve your retirement goals. From there, make a plan to supercharge savings.

Not saving enough for retirement

K Abrahams/peopleimages.com/Adobe senior couple doing budget

Retirement costs can add up quickly. Unfortunately, many investors don’t save enough for their golden years. If you don’t want to come up short on retirement funds, make it a priority to invest more during your 50s.

Determine how much you want to invest before retirement. With a number in mind, make the necessary changes to fit investment goals into your budget.

Paying the minimum on credit cards

Adobe/Farknot Architect A woman holds three credit cards in her hands.

When you only make the minimum payment on credit cards, you can expect to spend years paying off the balance, thanks to the notoriously high interest rates attached to these cards.

If you cannot afford to pay more than the minimum on your credit cards, then you have likely spent well beyond your means.

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Retiring too early

Cozine/Adobe hand saving in retirement jar

It’s tempting to say goodbye to the working world in your 50s. After all, you probably have plenty of other activities you would rather be doing.

But the reality is that retiring too soon could endanger future retirement plans.

Instead of jumping into an early retirement, take a close look at the numbers. If you can afford to retire without jeopardizing a comfortable retirement, early retirement might make sense.

But if retiring early could put a strain on your financial future, keep your day job a little while longer.

Putting off estate planning

gunnar3000/Adobe real estate plan documents folder

Estate planning often involves some uncomfortable conversations. However, if you are in your 50s, it’s important to start thinking about what will happen to your assets after you are gone.

A solid estate plan sorts out the details of what happens to your finances when you die. Working out the details and putting them in writing with a professional's help can protect your wishes.

Taking money from retirement accounts too early

sorrapongs/Adobe savings in jar with retirement label

The funds you have tucked away into retirement accounts are designed to help you pay for retirement. Although you can dip into these savings prematurely, that is usually a big mistake.

Not only can you face a penalty for withdrawing funds from your tax-advantaged retirement accounts before age 59.5, but you also will likely have to pay taxes on the amount you withdraw. This can be a major setback for your retirement savings plans.

Spending too much on the kids

LIGHTFIELD STUDIOS/Adobe senior couple sitting at home as counting money

It’s tempting to spend too much on your kids throughout their lives. After all, most parents want to help out. But the costs of spending on your kids can add up quickly.

Consider setting a budget for how much you can comfortably spend on your children. Do your best to stick to that predetermined amount.

Otherwise, you could end up stretching your budget too far in order to purchase fun items and activities for your kids instead of saving for essentials like retirement.

Going crazy on expensive home renovations

Pixel-Shot/Adobe house model

Every homeowner feels the tug to renovate from time to time. A renovation can transform the look and feel of a space.

But it can also completely gut your finances.

Before embarking on a renovation, set clear limits on what you are willing to spend. Try to stick to renovations that add value to your home or solve a necessary safety issue.

Planning expensive vacations

Pcess609/Adobe A tourist is carefully planning his budget while seated at a table. A plane,globe,camera and glasses depict his desire for a world tour experience

A lavish vacation might be on your bucket list. But expensive vacations can derail savings goals.

Before planning an expensive vacation, take a look at your budget and financial goals to determine if a luxury vacation makes sense. It is often possible to have just as much fun on a budget-friendly vacation.

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Buying expensive cars

DragonImages/Adobe test drive concept

Expensive cars offer a way to upgrade your lifestyle. However, they can also drain savings and increase ongoing expenses.

Before driving a luxury vehicle off the lot, make sure it truly fits into your budget without cutting into savings goals.

Forgetting to build an emergency fund

Deemerwha studio/Adobe saving for an emergency concept

An emergency fund provides a financial barrier between you and whatever life throws your way. If you are in your 50s without an emergency fund, it can be a recipe for disaster.

For example, if your furnace needs a major repair, will you have the funds on hand to cover it? If not, you might have to take on extra debt that will make it even harder to save going forward.

Most experts suggest growing an emergency fund that covers three to six months’ worth of expenses. Do your best to build this safety net.

Falling deeply into debt

Shisu_ka/Adobe stressed about credit card debt

Debt — especially high-interest debt — acts like a drain on your financial resources.

Including mortgage debt, the average American holds around $101,000 in total debt, according to Debt.org. Unfortunately, carrying six figures of debt can put significant pressure on your financial situation.

If possible, make an effort to eliminate some money stress during your 50s by paying down debt and avoiding taking on new debt.

Bottom line

Rostislav Sedlacek/Adobe inserts a coin into a piggy bank

As you navigate your 50s, it’s a good time to get your finances under control. You might want to make sure you get out of debt or beef up your retirement savings.

As you move forward, take action so you enter your golden years in the strongest financial shape possible.

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Author Details

Sarah Sharkey

Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make more informed decisions. She covers mortgages, insurance, money management, travel, and more.