Personal Finance

Eight New Year’s Resolutions for Baby Boomers and Pre-Retirees

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by Alli Thomas

Jan 7, 2019

Happy 2019! In the spirit of the New Year, here are eight resolutions we think are especially important for Baby Boomers and workers who are within five years of retirement:


1. Resolve to envision your ideal retirement.

Everyone has different ideas about how they want to spend their retirement. Some things to consider:


  • Will you leave the workforce for good or will you work part-time to keep your skills sharp?
  • Will you use your newfound free time to travel frequently, take up new hobbies, or attend educational classes?
  • Will you relocate to another city or country?
  • Will you downsize or buy a second home?
  • If you’re married and your spouse also works, will they retire with you, or continue working? We made a case for spouses to rethink retiring at the same time here.


2. Resolve to pay off your credit cards and your mortgage before you retire.

The number of Baby Boomers declaring bankruptcy has tripled in the last 25 years and 44% of retirees between 60 and 70 are still making mortgage payments. Debt repayments can quickly eat into retirement income. If you have significant levels of credit card debt or a large mortgage, consider delaying retirement until after you pay the debt down.


3. Resolve to determine your Social Security strategy.

Will you start claiming Social Security as early as possible (age 62), or will you wait until your full retirement age to maximize your benefit? You don’t need to start taking Social Security when you retire. In fact, it may be advantageous to wait if you don’t need the income. If you start taking your benefits before your full retirement age (currently 66 if you were born between 1943 and 1954), your benefit amount will be reduced. And if you decide to go back to work after you start receiving Social Security benefits, your benefit amount may also change. Learn more here.


4. Resolve to reassess your investment allocation.

Since February 2018, the U.S. stock market has been bumpy – and the volatility is expected to continue in the New Year. If you’re an older worker or a retiree, you don’t have the luxury of time to make up for any big swings in the value of your retirement savings, so it’s especially important to ensure your investment allocation aligns with your time horizon and your risk tolerance. If market volatility is still making you antsy even though your allocation looks good, the 4-Box Strategy may help you manage your anxiety.


Is your retirement ready for the next market crash?

Find Out


5. Resolve to maximize your retirement income while minimizing your tax bill.

Investing in a variety of tax-deferred, tax-free, and taxable retirement accounts enables you to manage your tax bill better if you plan the sequence and amounts of your withdrawals properly. If most or all of your savings are in a tax-deferred account, consider doing a Roth IRA conversion.


6. Resolve to understand your health insurance options in retirement.

If you’re approaching 65, make sure that you don’t find yourself without healthcare coverage by signing up for Medicare. You can do this up to three months before your 65thbirthday, and Medicare will kick in the month in which you turn 65. If you’re retiring before 65, you’ll either have to enroll in your state’s health insurance exchange or buy coverage from another source.


7. Resolve to review all important legal and financial documents.

Make sure documents like your will, your trust fund, healthcare proxy, and life insurance policies are up-to-date and reflect your current wishes. Review your named beneficiaries and power of attorney (POA) assignees. If you haven’t assigned POA to anyone yet, now is the time to have that conversation. Be sure to provide photocopies of all documents to those who may need them.


8. Resolve to consult a financial advisor.

Even if you prefer to work without an advisor, you may benefit from a meeting or two with one ahead of retiring as they may bring up some aspect of retirement planning you hadn’t considered or ideas that you find worth trying. This resolution is probably the easiest one to stick to ­– all you have to do get started is click here to request a free consultation with a member of our advisor network.


We wish you a happy, healthy, and prosperous New Year!

Alli Thomas

Alli Thomas has worked in the financial services industry for nearly 20 years, with a focus on retirement-related investing. She began her career as a FINRA-licensed participant-services call-center associate at Vanguard, and then moved to Principal Financial Group, where she worked closely with employers, assisting with retirement plan set-up and design, selecting appropriate plan investment offerings, and maximizing employee participation through targeted education campaigns and enrollment meetings. Alli has also worked as a qualified 401(k) administrator and registered investment advisor for several small investment firms. She now writes about all things investment- and finance-related, leveraging her extensive experience and passion for retirement planning to help investors make well-informed financial decisions.

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