What if retirement isn’t the ticket to gold that everyone anticipates? A 2024 Bankrate survey indicates that 37% of baby boomers regret saving insufficiently for retirement the most popular regret by far. But here’s the catch: for many, the true surprise occurs once party hats have been put away and days linger on, unstructured and, at times, a tad too serene.
Increasingly, boomers are in the ranks of the “un-retired,” returning to work or starting new enterprises not for the money, but for purpose and sanity. As TV producer George Jerjian told CNBC’s Make It, “My enthusiasm and energy diminished. My mental health suffered.” He’s not alone retirement brings with it often unanticipated challenges, from financial surprises to the quest for meaning. These are the most surprising lessons and real money steps boomers regret not having known earlier.
1. Discovering Purpose Is Retirement’s Silent Overlooked Challenge
Money concerns are valid, but the largest retirement challenge for many is not financial it’s a search for purpose. George Jerjian, following an early health-forced retirement, admitted to being “bored, restless and stuck.” His survey of more than 15,000 retirees saw the number one challenge being a lack of purpose, not shrinking dollars. As Jerjian wrote, “The biggest retirement challenge that no one talks about, in my experience, is finding purpose.” This sense of aimlessness can impact mental health, making it crucial to plan not just your finances, but also how you’ll spend your time.
Nan Ives, who retired early from Fidelity, seconded this: “If you retire at 60, there’s people living to their nineties. That’s a third of your life. To do what?” The take-away? Plan out activities, hobbies, or even employment part-time prior to retirement it’s as crucial as your financial plan.
2. Don’t Borrow from Your 401(k) It’s Riskier Than You Think
It’s easy to tap into your 401(k) for unexpected expenses, but the stakes are greater than most understand. As journalist Bob Neidt wrote in AARP, taking a loan from your 401(k) can rebound against you: “Even if you can both contribute and repay the loan, you may not be able to because some plans don’t permit contributing until the loan is paid back.” Worse yet, if you quit your job, you may owe it all back in 60 days or pay taxes and penalties.
Financial planners at Fidelity caution that skipping out on employer contributions and investment gains during repayment can take a heavy toll on your nest egg. Before borrowing, explore alternatives such as a health savings account (HSA) or a home equity line of credit, but always consider the long-term effect on your retirement security.
3. Eliminate Credit Card Debt Before You Retire
Bringing high-interest debt into retirement is a formula for worry. Older Americans are holding more debt than ever before, particularly on credit cards, says the Center for Retirement Research at Boston College. Neidt’s tip: “One thing you don’t want to bring into retirement is a great deal of debt.”
Addressing debt prior to retirement frees up your budget and causes less stress. The debt snowball or avalanche method can work for you, and rounding up purchases or paying every two weeks can speed up your repayment. If you’re feeling overwhelmed, nonprofit credit counseling agencies can provide assistance.
4. Begin Saving Early Compound Interest Is Your Best Friend
The sooner you begin saving, the more you take advantage of the power of compound interest. A Bankrate example illustrates that beginning at age 25 with only $100 monthly can reach nearly $96,000 at 65. Hold off until age 35, and you will have less than two-thirds of this amount even with the same contribution each month.
If you get to the party late, don’t worry. Catch-up contributions to your IRA or 401(k) after age 50 can help you catch up. Consistency is the key enroll in automatic contributions and utilize employer matching whenever available.
5. Health Savings Accounts (HSAs): The Hidden Retirement Giant
One of the largest costs in retirement is healthcare, and Fidelity puts the cost for the average 65-year-old retiree at $165,000. That’s where the HSA comes in a triple-tax-advantaged account that can be a retirement savings secret weapon. As Morgan Stanley’s Dana Erdfarb puts it, “People see the high deductible and get scared away, but it’s worth a conversation with your Financial Advisor about the financial benefits that the HSA can offer.”
HSAs allow you to save tax-free, invest for growth, and take tax-free withdrawals for qualified medical expenses even in retirement. After age 65, you can take HSA funds for non-medical expenses without penalty (although you’ll pay income tax, as with a traditional IRA). For 2024, you can contribute up to $4,150 (individuals) or $8,300 (families), plus a $1,000 catch-up if you’re age 55 or older. Investing your HSA balance can turbocharge its growth for future healthcare expenses.
6. Don’t Bank on Working Forever Have a Plan B
Some boomers hope to work beyond age 65, but life tends to have other plans. Illness, downsizing, or caregiving needs can lead to an unexpected early retirement. In a Fidelity survey, more than half of workers intend to continue working part time in retirement, but only 34% have a Plan B if that’s not an option.
The actionable advice: save early and frequently, have current skills, and establish an emergency fund. Don’t count on the possibility of being able to make extra money in the future plan for flexibility.
7. Plan for Boredom and Structure Not Just Finances
Retirement is not only an economic change it’s a way of life. Most new retirees, such as those interviewed in the Boldin community, report feeling stymied by boredom and lack of routine. “Work provided my day with structure. Without it, I had too much time to think and not enough to do,” one retiree said.
They recommend establishing routines, following hobbies, giving back through volunteer work, or even taking a part-time job to instill a sense of purpose. As Oliver Burkeman’s book “Four Thousand Weeks” reminds us, time is limited how you spend it matters no less than how you pay for it.
Retirement is a milestone, but not the finish line it’s a new book with its own surprises and detours. The secret? Plan for both the dollars and the days. With a forward-looking attitude toward saving, debt, health, and purpose, you can design a retirement that’s not only financially sound, but richly meaningful. The un-retired boomer strategy is simple: plan ahead, be nimble, and don’t doubt the power of purpose.
