A recent retiree shares lessons learned late about saving money and spending time

Everyone nearing retirement has a vision of what their road will be like once they clock out of the 9-to-5. Maybe that prophecy includes regular travel, longer trips to see the grandchildren, volunteering or finally having the time to work on that screenplay that’s been in your back pocket.

Retirement can be any or all of those things, but you’re going to have to season that stew with a heaping spoonful of reality. Other things are going to occupy your time, and your money.

Says who? Me. I recently retired after a 45-year career as a journalist. I’m still in the throes of trying to figure this thing out while, yes, traveling a bit more, making plans to see family more and getting a new house in order.

It hasn’t been too difficult, but with a little guidance, I could have had a softer landing. To that end, here are six things I wish I’d known in the years leading up to retirement.

1. Don’t borrow from your 401(k)

Yes, I made the classic bad financial move in my 40s. I borrowed from my 401(k). My money, my rules, right?

Technically, yes, and the IRS allows it. You can borrow up to $50,000, or 50 percent of the vested amount in the account, and it must be paid back within five years. Raising four kids, our family hit a wall of expensive credit card debt. That was my excuse when I borrowed $5,000 from my 401(k); retirement took a back seat as it seemed so far off.

Why is it a bad idea? Unless you aggressively pay back the loan, that’s $5,000 less sitting in your retirement pot, and $5,000 less earning investment returns, for years.

Rapid repayment wasn’t something I could afford at the time. I merely went through the required motions, paying back the loan on time but not increasing my contributions later, when I could afford it. I ended up putting less into my plan over time, costing me retirement funds that would come in handy now.

Even if you can afford to both contribute and pay back the loan, you might not be able to: Some retirement plans forbid contributions while you’re repaying. That’s more missed opportunities to generate gains — especially when you factor in lost employer matches — and more lost time growing your nest egg.

2. Pay down credit card debt before retirement

One thing you don’t want to carry into retirement is a lot of debt. Generally, you’re on a fixed income. Siphoning off some of it to pay high-interest credit card debt, for example, is not a burden worth cramping your retirement lifestyle for, especially as credit card interest rates continue to skyrocket.

To be fair, I did pay off my credit card debt before I retired, but that’s because I was self-motivated. I didn’t get a lot of guidance. I just knew I’d better clean up that debt before the full-time paychecks stopped coming.

3. Consider a health savings account

Unfortunately, by the time I fully understood how powerful a health savings account (HSA) could be in retirement, it was too late for me to build one. Maybe it’s not too late for you: More than two in five people still working with household income of less than $50,000 are not saving for health care expenses in retirement, according to a 2021 report from the Transamerica Center for Retirement Studies.

You can open an HSA if you have a high-deductible health plan and no other coverage. While you’re working, you can contribute on a tax-free basis, and unlike a flexible spending account (FSA) — earnings you set aside for medical costs but must use or lose annually — HSAs can be built up and carried over, year-to-year, into retirement.

You can take that money out, tax-free, to pay qualified health care costs not covered by private insurance or Medicare, including deductibles and copays (although if you have Medicare, you can no longer contribute to your HSA). After age 65, you can make withdrawals for nonmedical expenses, too, although in that case you’ll pay regular taxes on the money.

It’s no secret that as we age, health care becomes increasingly important and increasingly expensive. Having a well-funded HSA can be a powerful tool.

4. Get the lowdown on anywhere you’re thinking of moving

It’s always a good idea to spend some time in the place where you might want to retire. Get to know the ins and outs. My wife and I managed to do this, but more by happenstance than wisdom, landing in our “retirement home” of Staunton, Virginia, two years before we retired.

We had visited this small town in the Shenandoah Valley numerous times while living in Northern Virginia, close to our workplaces in the Washington area. Working remotely amid the pandemic lockdown in 2020, we decided to look at homes there. We fell in love with the first one we saw and, with our employers’ blessings, made the move.

Know what you’re getting into before you settle on a destination — not just what checks your boxes (in our case, mountain scenery, and lower property taxes and auto insurance than in the crowded Northern Virginia market) but what you might miss and what trade-offs are involved.

For example: Do you regularly dine out? Beware of meal taxes in your new hometown, particularly if it’s in a touristed area. Looking for good pizza or Italian food? You might not find it in your retirement town (we haven’t yet). Do you rely on close access to a Wegmans, WalmartCostco or other major retailer? Your new town might not have one. Swore you would never live in a community with a homeowners association? Me too – until I did.

5. Don’t assume everyone will have time for you

Spending time with family and friends looms large in most people’s plans for their post-work years: About three in five list it among their top “retirement dreams,” according to the Transamerica Center study. Only traveling ranked (slightly) higher.

That’s all well and good. But not everyone’s going to jump to your tune. Those old friends you haven’t seen in a while might already have retirement routines that are important to them. The kids have jobs and families, and they’re locked into the same rituals you went through when you were working and raising them.

We found this out when we planned a lengthy post-retirement trip to our hometown and wrongly guessed everyone from old pals to close family would have some time for us now that we had time for them. That didn’t work out so well.

The lesson? Plans and schedules don’t disappear when you retire. Factor that into your retirement goal of spending more time with the ones you love.

6. You might still need (or want) to work

We carefully planned for our retirement, utilizing the guidance of a certified financial planner who gave us the “go” signal. Like 68 percent of the U.S. adults polled by the Transamerica Center, we considered ourselves to be building a decent retirement nest egg.

We weren’t counting on staggering increases in grocery prices. According to a 2022 Goldman Sachs survey, 51 percent of retirees say their current income is less than half of their preretirement income. That’s a hit, and soaring inflation only makes it worse. Inflation and generating sufficient income were the top concerns among retirees polled by Goldman Sachs.

Such financial pressures can put work, at least part-time, back on the table. Forty-four percent of retirees surveyed in 2022 by investment management firm Schroders said their expenses in retirement were higher than expected; only 8 percent were spending less than they thought they would.

Inflation panic notwithstanding, my wife and I have (mostly) stayed the course, staying focused on nonwork activities (while staying on top of things with our financial planner). But even if you don’t need to work, you may find you want to. That’s the case for me, as evident here. I can’t turn away from being a writer, ever. So that I will continue to do.

Back to the Schroders poll: More than two-thirds of workers ages 45-plus say they plan to work in retirement, and about half say a primary reason is to stay busy or keep active. That could mean keeping a hand in the same field, like me; it could mean starting a business or pursuing an encore career. One in four workers surveyed by the Transamerica Center said they dream of spending their retirement years doing volunteer work.

Working in retirement because you want to instead of need to, I’ve found, is a great pressure valve for what could be perceived as the, well, boredom of retirement. We’re not used to having so much time on our hands, away from the 40-hour grind.