Baby Boomers and 401(k) Regret: What Went Wrong with Your Retirement?

Choosing when to retire takes a lot of planning. The timing of your retirement can impact how much you’re able to save, the amount of social security you’ll get each month, and how much debt you can wipe out before you stop getting a paycheck.

Taking Social Security Too Early

You can legally claim social security before the age of 65. However, every year that you take it before the age of 70 will impact how much you are able to ultimately qualify for. If potential retirees can wait until the age of 66, or even better, 70, their social security payouts will actually provide a living income.

During your last working years, do put a plan in place to slowly remove yourself from the office. If you can go part-time, or work part-time from home, do so. Spend your weekends learning new skills that you can turn into a hobby. Study up on activities you’ve always thought would be fun so that when you’re no longer going to the office you have a way to occupy your time. Getting old isn’t easy, but loneliness can be damaging to your health. Build community before you retire.

Relocating Without Scouting it Out

If you’ve always lived in the north, relocating to the desert or to a condo in the southeast may sound like heaven. However, relocating after retirement means that you will move away from your support system, such as family and friends who could help you out in the event of an emergency.

You’ll also have to figure out new systems for living. Your grocery store, drug store, physician, dentist and gym will all need to change. Change is stressful and can be very frustrating. Buyer’s remorse is hard, but buyer’s remorse after moving to a brand new region of the country can be isolating.

Not Saving Enough

Nobody has ever claimed that they were sad they had money in the bank. If you’re not sure how much to save, sit down and study up on your spending. Carefully review all of your

• bank statements
• credit card statements
• cash receipts

so you can track where your money goes. This exercise is not about beating yourself up. It’s about becoming aware of where your dollars are going and knowing exactly how much cash you need to live comfortably each month.

It’s also about saving enough for a rough time. If you’ve never put together a budget, start one. If you take a look at all of your incomings and outgoings and come to the disturbing realization that you really can’t afford full retirement, consider picking up a part time job. If possible, get your part time job somewhere that will help you build community, a hobby or even a side business.

Retiring With Too Much Debt

We get used to dealing with long term debts, such as car payments and mortgage bills. However, before you retire it’s a good idea to wipe out as much of that as possible. If you are approaching retirement and your mortgage payments are still looming, consider downsizing to a smaller home.

Downsizing can actually be a gift. You can sell a larger house and only move what you love into a smaller space. You can have less yard to manage. You can even move into a condo or buy an apartment that only has a patio or a balcony to contend with.

Taking this action now can also help you gain full value from your current home. One of the biggest challenges that seniors can face is to be forced into downsizing by an injury or an illness. If you have to sell in a hurry, you will not make as much money from the sale of your home, nor will you have the time to pick out exactly the new home you want, if you have to rush the process. Downsize before retirement if at all possible.

Change is hard. Moving to a new job is challenging. Moving out of the working world can leave you feeling untethered and alone. Spend your last years in the workforce planning out what a life without a job will look like and make financial decisions that will leave you comfortable and secure in your investments, any pensions you have coming, and your social security payouts.