Toxic friend and severing the friendship?

I have known this woman for 18 years. She and my son are the same age, both children met in pre-school. Both children are now young adults and off to college. The twist to this story is I had my son at 19 years of age , this woman had her child in her early 40's and she is now 60-62 years of age.

The problem I am having with her is she seems to be going through a mid life crisis, competing with me, always making random comments about me (appearance, clothes, weight, body frame, etc). She recently moved in my neighborhood (few doors down) and getting involved in the neighbors business (marital issues and disagreements). She tries to act like a teenager and the worst thing is my parents are exactly her age and when I invited her in the past to my sons birthday parties she would call my parents: Mom and pops like a young person, mind you she is the same age. To where other guest were appalled by her behavior and called later to ask who the old lady was.

Everytime someone comments on something it could be a general friendly conversation, she corrects them if she feels their statement or comment is politically incorrect to her standards and she acts as though if she knows it all, when she does not.

I am drained and feel she is toxic. I recently flat out told her I no longer want to be friends with her. I feel our kids are old enough to communicate and continue on with there friendship since they are now older. I feel I no longer have to deal with her just because our kids are friends since pre-school.

Even my son commented one time she called him over to her house to assist her with computer, he commented to me privately as he was working on her computer. Someone called her and she was talking and making racial remarks that did not sit well with him. It bothered him but he didn't say anything to her but confided in me.

Am I wrong for severing ties with this person? ( I did not give her a full explanation) I basically said I am done and have not been in contact with her since. Problem is we live in the same neighborhood and a few doors down from each other.