The coming retirement tidal wave of the Baby Boomer generation is a cause for concern. There are many folks who have long dreamed of a leisurely retirement, but have either struggled to save or not prepared fully to fund their life through the end of their days.
Scary Lack of Savings
Current indications are that one quarter of Americans have no retirement savings at all. Additional data on older Americans indicate that, as a nation, we are not saving enough to enjoy a safe and healthy retirement.
In addition to simply not saving enough or not having a savings vehicle in place, too many aging workers are tapping into retirement savings early. While access to a loan can certainly help to get through a rough patch, the choice to directly take funds out of a retirement account before age 59 and a half is seldom smart. The double hit of taxes and penalties nearly always makes this withdrawal a poor choice.
Additionally, approximately one third of Americans live alone. While some elders thrive on their own and enjoy the control a solo life can give, there are many who struggle with:
- the psychological and physical impact of isolation
- limited mental stimulation
- limited physical activity
- poor nutrition, either because of limited funds or low appetite
While there are many ways to protect your brain and build community, there is a strong chance that an isolated elder will simply grow more isolated with time.
Relying on Work for More than Money
There are many older Americans who have a social structure built around work. While that can be wonderful for your career, too many retirees find that, once they leave the office, their social structure collapses.
One of the best things that someone in the decade before retirement can do is to build social connections and strong relationships outside of work. The transition from working to retired may mean that you lose some connections with work friends, or that you see each other less. However, it does not have to mean that your social circle shrinks.
Your Next Career
It may also be time to go back to work. Many of us really enjoy the chance to:
- have a schedule
- make a little money
- meet new people
- help folks out
- get out of the house
Oftentimes, your next career can actually start while you are still working full time. If your children are now out of the house, you probably have more time and perhaps a bit more money. Have you always been interested in a particular field or activity? Now is the time to take a class. Take some of that vacation time and find a seminar on the topic. Now is the time to follow your passions, and if they can turn into a job, so be it.
Avoid trying to turn a hobby into a job, however. You will need something to do with your time that you just do for love. Stick with your hobbies as hobbies, and enjoy the chance to lavish your time on them.
How to Get Ready
Get as financially free as you can before you set your retirement date. Wipe out as much debt as possible. Downsize, sell your home, or make adjustments to your current home so you can age in place. Set up laundry on the main floor, and try to make sure you can shower and sleep on the main floor if stairs become impossible, even for a short time.
Even if you have enough to retire comfortably, uncertainty in the world has taught us that the ability to change quickly is crucial. Do your best to set up your life in such a way that your days are full when you leave the office. Build social connections and relationships outside of work now.