5 smart things wealthy baby boomers do with their money that basically guarantees them a comfy lifestyle — how many do you do?

1. Avoid lifestyle creep

An improvement in your finances, such as a raise at work or an inheritance, shouldn’t be an excuse to go out and spend.

The strategizing boomer knows that any boost to income should go to savings and investments. In other words, they live below their means.

However, it’s all too common for a lot of people to spend what they earn — a losing proposition when it comes to saving for retirement. Instead of indiscriminate spending, follow the advice that finance writer Elizabeth Aldrich’s father gave her, and create a retirement budget and stick to it.

As Aldrich told Business Insider, her father managed to retire at 55 — five years later than his target age of 50, thanks to the Great Recession of 2008 — by figuring out exactly how much money he needed to comfortably retire. He then worked backwards to figure out how much he needed to save each year, including the expected rate of return on investments. Aldrich’s stepmom did the same and retired even younger, at 49.

To get there, they reduced their spending and made sure any extra money went toward their goal.

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2. Auto-save, always

Out of sight, out of mind is the smart payday rule for the boomer who has managed to retire with confidence. That means earnings are automatically transferred to savings and investment accounts as soon as the wages are deposited.

Also known as the “pay yourself first” strategy, it’s based on the idea that investing as much money as possible each month means maximizing the accumulation of interest and, eventually, generating exponential growth. The process is also known as compounding, and it’s crucial for building wealth.

3. Invest aggressively

Invest regularly, experts like Dave Ramsey say ideally 10% to 15% of your income annually.

And be sure to diversify. Boomers with a comfortable nest egg have typically invested in a portfolio that includes various asset classes such as stocks, commodities and exchange traded funds. And as they neared retirement age, they likely moved a chunk of their holdings into safer fixed-income investments like bonds or certificates of deposit (CDs).

They also invest in real estate. A rental property is a hedge against inflation because when costs climb, so do rents.

Real estate is also a sound investment because it often appreciates at a rate greater than that of inflation. The trick is to keep mortgage payments from climbing, if possible, by finding the best possible fixed rate.

Finally, the savvy boomer will continue to invest even after they retire. There’s no age limit on contributions to a Roth individual retirement account (IRA), for example, as long as the contributor earns income.

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4. Don’t live on credit

For the first time ever, credit card debt in the U.S. has reached more than $1 trillion — and kept climbing from there to $1.08 trillion in Q3 2023, according to the latest debt report from the Federal Reserve Bank of New York.

For those who carry balances each month, paying with cash or using a debit card to pay for purchases might be the better way.

Otherwise, create a budget so you can see where the money is going and how much you need to set aside to pay off the credit card each month. It’s important, because a poor credit score can increase your interest rate when borrowing and limit your access to borrowing.

“You want to limit the burden of interest payments, so always make more than the minimum payment to save money in the long run,” according to BDO Debt Solutions.

5. Ask what would Warren do?

Billionaire Warren Buffett has lived in the same house since 1958. Talk about living within your means.

“I have everything in life I want. It’s a very simple thing,” he told an audience years ago, alongside his late Berkshire Hathaway partner, Charlie Munger.

Both men joked about their shared frugal habits, and teased each other about living in the same houses for so long. And they credited their frugal ways for their company’s success.

“I do not think that standard of living equates with cost of living beyond a certain point,” Buffett told the crowd. “My life would not be happier — in fact, it would be worse — if I had six or eight houses or you know a whole bunch of different things I could have. It just doesn't correlate.”