When it comes to retirement, you should take it from people who’ve been there. We asked three different retired couples what kind of advice they would’ve given to their younger selves, and these were the biggest takeaways.
Editor’s note: The names of the retirees have been changed to protect their privacy.
1. Start saving ASAP ...
Jackie, 70, is a former teacher and bank teller, and her husband, Carl, 72, had a career in management with an auto company. Jackie says she and her husband started thinking about retirement as soon as they graduated college together.
“We started out with just $5 every pay period,” she says. “When we got raises, we took half of each raise, and it went into some kind of savings or investment.”
By starting their savings in their early 20s, maintaining a modest lifestyle, and then saving or investing a portion of any additional income they accumulated over time, Jackie and Carl were able to retire early.
2. ... but don’t retire ASAP
Jackie says she retired from teaching in 2004, when she was only 54. However, after just a year of being retired, she went back to work part time as a bank teller.
“The first year, it was kind of great, but then by the end of that year, I just missed being with people,” she says.
Ultimately, Jackie ended up working five more years. Similarly, her husband, who had first retired in 2001 at the age of 53, ended up working in local politics for a few years. Then, he went back to his old job for a few more years after that.
“We both should have worked a little longer,” Jackie says. “Going back to work helped us pay for some things, but it was more about having something to do.”
So just because you can retire, it doesn’t mean you should right away. Delaying retirement even just a year or two longer than you need to can make a significant financial difference and give you an opportunity to figure out what you want to do with all your free time when you do pull the trigger. Picking up new skills and hobbies and getting involved in local community organizations has helped Jackie and Carl enjoy their retirement more the second time around.
3. Invest in your health—not just your retirement fund
Bob, 70, a former production worker, and Linda, 69, a former office assistant, live modestly but comfortably in a small midwestern town. Bob has been retired for 10 years, and Linda eight years. Financially, they felt fairly prepared for their retirement, but Linda says one reason she retired was her health.
“If I could change anything, I would’ve concentrated more on my health before I retired. Now, I’m exercising, but I wasn’t before,” she says. “I felt as if there wasn’t time for it—but there was. I’ve had some health issues, so now I’m concentrating more on that.”
Linda says an extra cost in retirement related to her health is her medications, one of which is particularly expensive.
“We’re very fortunate that we can afford that. Even with Medicare and our supplemental insurance, it’s still expensive,” she says. “If the cost of it keeps going up, it could be a burden at some point.”
The cost of prescriptions and appointments can quickly add up for retirees, but living a healthy lifestyle can help you avoid some of those potential costs altogether.
4. Structure your savings
While retirement was always in the back of Bob’s mind, he says he wishes he was a more structured saver during his earning years.
“I’ve heard people say, ‘You want to just take 10% of what you earn and save that in addition to your pension and 401(k).’ I might’ve done something like that—a little more savings,” he says.
Many retirees regret not having a structured savings habit—but that’s something you can put into practice immediately, even if you have to start small. Like exercising a muscle, remember that small habits can lead to big changes.
Generally, we recommend investing at least 10% of your income for retirement (more if you’re able to or need to catch up). Diversifying your retirement investments and using tax-advantaged vehicles like 401(k)s or IRAs are also important tactics.
5. Live below your means
June retired in early 2020 at the age of 69. Her husband, Greg, retired about two years ago, just before he turned 65. While they live a practical, affordable lifestyle now, June has considered some of her financial choices from her earlier years and whether she could’ve lived differently.
“My family grew up so modestly, but I just wanted more when I started working,” she says. “I never lived within my means—I used credit cards a lot, even though I paid them off. But I wasn’t saving.”
“Lifestyle creep” is a term used to describe leading a more expensive lifestyle as your income increases—and it’s something many financial planners warn us to avoid. It’s natural to want more or nicer things as you make more money, but saving and investing more rather than buying more can pay off big in the long run.
“Any time that we reached a good moment, I’d say, ‘It’s time to move into a better house.’ We never stayed in one house long enough to pay it off,” June says. “I would advise anybody to live below your means and start saving immediately.”
June did ramp up her retirement savings later on in her career, although it’s important to remember that shorter investing horizons do not provide as much time for your investments to grow and reap the benefits of compound interest.
Different journeys, similar advice
While every individual’s retirement journey is unique, when you speak with enough retirees, you notice some universal tips that can apply to anyone: Take care of your physical and mental health in addition to your financial health, start saving as early and consistently as possible, live within (or below) your means, and stay involved with your community.
These simple tips can go a long way—but meeting with an experienced, certified financial planner can also help you wrap your head around your retirement goals and how you’re tracking against them. Use it as an opportunity to improve your financial confidence and well-being. Your future self will thank you.