7 Costly Retirement Mistakes Baby Boomers Regret 

Baby boomers, born between 1946 and 1964, are now entering or living in retirement. While many have enjoyed fulfilling careers and financial stability, others may face financial struggles that stem from key mistakes they wish they had avoided. Their most common regret? Not saving enough for retirement.¹ By reflecting on the seven most common financial regrets of baby boomers, younger generations can learn valuable lessons to help avoid making the same mistakes.  

Regret #1: Not saving enough for retirement   

Saving for retirement might not be a priority when you’re starting your career, but thanks to the power of compound interest, it pays to start early. Every dollar you save today has the potential to grow exponentially over time. 

Imagine you start saving when you’re 25 years old. You make an initial $1,000 deposit and contribute $100 each month for 10 years in a high-yield savings account earning a 3% return that compounds monthly. In 10 years, you’ll have saved $15,323. In 40 years, when you’re 65, you’ll have $95,921 saved — and only have contributed $49,000.  

Now let’s imagine you start saving 10 years later when you’re 35. You make the same $1,000 deposit and contribute $100 a month, earning 3% interest compounded monthly. In 30 years, when you turn 65, you’ll have $60,730. That’s the power of compound interest and consistent saving.  

Regret #2: Not paying off credit card debt 

Since the 1990s, older Americans have increasingly carried debt.² While mortgage debt accounts for a large portion of this increase, other forms of non-secured debt include student loans, medical bills, and credit card debt. Not all debt is bad, but when it comes to financial regrets, 13% percent of baby boomers wish they hadn’t accumulated credit card debt, making it the second most common regret after not saving enough for retirement.¹  

Eliminating high-interest debt before retirement can put more wiggle room in your budget, especially when you’re on a fixed income. For guidance on developing repayment plans and eliminating bad debt, read our article. 

Regret #3: Borrowing from your 401(k) 

As long as your plan sponsor permits borrowing, taking a loan from your 401(k) account can be tempting. However, it’s a mistake that can derail your retirement savings. If you take a loan, you’re likely to reduce or suspend new contributions during the repayment period – that means you’re sacrificing the free money that comes from employer matches. You’re also missing out on the investment growth potential from both the missed contributions and on the money you borrowed. 

Another consideration is that loans are usually paid back over five years. If you leave your employer before the loan is paid off, you must pay back the loan in full within 60 to 90 days, or it becomes a taxable distribution. And if you’re below the age of 59 ½, there’s an additional 10% penalty. 

Regret #4: Claiming Social Security too early 

Although you can begin collecting Social Security benefits at age 62, waiting until your full retirement age (67 for those born after 1959) or even up to age 70 for a larger monthly benefit is usually advisable. If you claim early, your payments will be reduced by 30%. Delaying them on the other hand, will increase your benefits by 8% for every year you wait. The best strategies vary for couples, widows, and divorced spouses. Visit our library of Social Security articles for more information. 

Regret #5: Ignoring long-term care 

Although we want to believe we’ll stay healthy and in good shape long into our retirement years, aging often brings physical and mental challenges. Good nutrition, exercise, and routine medical care can help, but long-term care may still become necessary. Even a sizable retirement nest egg can be wiped out with assisted living costs estimated at $4,995 per month, memory care at $6,200 per month, independent living at $3,100 per month, and in-home care at $30 per hour.³ 

Keep in mind that Medicare typically doesn’t cover most of these costs, potentially depleting even substantial savings. Planning ahead with a long-term care insurance policy can help protect your nest egg.  

Regret #6: Neglecting estate planning 

If you think estate planning is just for the wealthy, think again. Many retirees regret not taking the necessary steps to protect their families with an estate plan. Without a will or trust, assets are distributed according to state laws and can lead to disputes among family members. Probate – the distribution of assets under court supervision – can last months or years and cost between 5% to 20% of an estate’s assets.⁴ Additionally, failing to establish powers of attorney or healthcare directives can create difficulties if you become incapacitated, potentially leaving your family struggling to make financial and medical decisions on your behalf. 

A lack of planning can also cause complications for business owners or property holders, potentially forcing sales or legal battles. Without proper safeguards like trusts, assets may be vulnerable to creditors or mismanagement by heirs.  

Visit our knowledge base to learn more about estate planning, including 10 common mistakes to avoid, how to plan for children with special needs, the importance of updating your estate plan after a divorce, estate planning for business owners, and more. 

Regret #7: Planning to work indefinitely 

Many baby boomers plan to work beyond age 65, whether by choice, necessity or to maximize their Social Security benefits. According to a recent survey, over half of all workers intend to work part-time during retirement for an extended period.⁵ Additionally, more older workers are transitioning into retirement gradually by taking on part-time or flexible hours.

However, this plan might not go as expected. Retirement could come earlier due to unforeseen circumstances. Health issues, either personal or involving a loved one, can force an early exit. Employer-related factors, such as layoffs, downsizing, or buyouts, can also play a role. Furthermore, the inability to stay current with skills can make it harder for older workers to secure new positions. The key takeaway: Prepare for unexpected challenges by saving early and consistently. 

For 40 years, Mercer Advisors has helped clients throughout their retirement journey. From planning for retirement to relocating in retirement, we’ve provided a steady hand to guide people through this exciting time. If you’re ready to learn how we can help you achieve the retirement lifestyle you deserve, let’s talk. 

¹ Gillespie, Lane. “Survey: 2 in 5 Americans Regret Not Saving Enough for Retirement or Emergencies.” Bankrate, 28 August 2024.

²  Chen, Anqi, Siyan Liu, and Alicia H. Munnell. “What Are the Implications of Rising Debt for Older Americans?” Center for Retirement Research at Boston College. 26 September 2023.

³  APlaceForMom.com. “2024 Report Cost of Long-Term Care and Senior Living.” A Place For Mom, 2024. 

⁴ “Everything You Need to Know About Probate.” U.S. News, 30 August 2022.  

⁵ Fidelity Newsroom. “Fidelity Investments® Research: Retirement Transforming as 2-in-3 Americans Live More Intentionally Post-Pandemic.” Fidelity, 12 March 2024.