5 things that are a complete waste of your money — whether you’re 45, 55, or 65. How many are killing your retirement plans?

With that in mind, here are five common money-wasters in your 40s and 50s that you can cut to stay on track toward lasting financial freedom.

1. Not downsizing once your nest is empty

Although about 19.2% of adults aged 25-34 still live with their parents, according to the National Association of Homebuilders (NAHB)’s analysis of the 2023 American Community Survey (ACS), there’s still a good chance you’ll be an empty-nester by your 50s or 60s. (1)

However, fewer people are choosing to downsize once their children move out. A 2024 Redfin survey found that empty-nester baby boomers owned roughly 28.2% of all the large homes in the U.S. (2)

Holding on to a large family home can strain your finances — they’re costly to maintain, insure, and tax. Downsizing or renting could free up significant equity and reduce expenses, giving your retirement savings a major boost.

2. Multiple cars

Owning multiple cars is common in the U.S. According to AutoInsurance, 37% of households have two cars, and 22% have three or more. (3)

Having multiple vehicles may be necessary when both partners work and commute regularly. But as you approach retirement, your need for extra cars often declines. Sharing one vehicle or switching to a more affordable model could save you thousands of dollars a year in insurance, maintenance, and registration costs.

3. Financially supporting your adult children

Nearly 40% of empty-nesters in the U.S. still provide financial support to their adult children, according to a survey by 55places, an active adult community helping with expenses like cell phone bills, rent, and groceries. (4)

Given today’s high housing and living costs, it’s understandable that many young adults lean on the “bank of Mom and Dad.” However, unlike their parents, younger adults typically have greater access to credit — through personal loans, credit cards, or mortgages.

Put simply, your child can borrow to cover their shortfall; you can’t borrow to fund your retirement. Gradually reducing financial support can help both generations build healthier, more sustainable finances.

4. Spending money on stuff rather than experiences

Your 40s, 50s, and 60s are generally for downsizing and decluttering, not accumulating more things.

Research published in the journal Current Opinion in Psychology found that spending on experiences often provides greater and longer-lasting satisfaction than spending money on material possessions. (5) So, skip the luxury watch and book that Mediterranean cruise instead.

5. Expensive or complex investments

There’s no extra reward for unnecessary complexity. As Warren Buffett and Charlie Munger once wrote in a joint letter to Berkshire Hathaway shareholders, “Simplicity has a way of improving performance through enabling us to better understand what we are doing.”

With that in mind, you can avoid high-fee or complicated products like private equity funds or leveraged ETFs and instead invest in low-cost index funds, which can help you reduce both fees and volatility over time.

Article sources

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National Association of Homebuilders (NAHB) (1); Redfin (2); AutoInsurance (3); 55places (4); Current Opinion on Psychology (5); Hedge Fund Alpha (6).