Tom retired at 67 after 35 years as a CFO. He spent his career managing risk with precision and applied the same discipline to his retirement finances.

His savings are solid, his withdrawal strategy is documented, and his estate plan is current. He walks every morning and sees his doctor twice a year.

By the industry's retirement checklist, he has done everything right.

However, according to a second checklist that may be even more important for a fulfilling retirement, four of his five pillars are missing.

Every retirement planning conversation eventually centers on the same five items:

• Savings rate
• Social Security timing
• Withdrawal strategy
• Healthcare costs
• Estate planning

These are legitimate concerns, well researched and worthy of careful attention. The financial planning industry has spent decades refining tools to address them.

They answer one question with considerable precision: Can you afford to retire?

However, research has identified a second important checklist. Those five pillars have received considerably less attention in planning conversations, generate no tax provisions and do not appear on any financial statement.

The second checklist predicts the quality of your retirement years more reliably than the first checklist. For most retirees, the score on the second checklist determines whether retirement feels like a reward or a long, quiet drift.

Five pillars of a fulfilling retirement

The five pillars of a fulfilling retirement are not a motivational framework. They are a research-based map of the conditions that sustain health, meaning and well-being in later life. Each has a body of longitudinal evidence behind it. Each is plannable. Yet, in most retirement conversations, each is left to chance.

Pillar No. 1: Exercise

Tom has this one covered. The daily walk, the Wednesday golf round, the annual physical and blood pressure well within range.

Golf, it is worth noting, ranks among the top three exercises for retirees alongside cycling and pickleball: The walking, the outdoor exposure and the social dimension compound its value beyond what most people assign it.

Among the five pillars, exercise is the one the financial industry most often acknowledges, though typically as a healthcare cost to plan for rather than as an asset to build.

The distinction matters. Physical activity is not only a hedge against medical expenses. It is also a cognitive protector, a mood regulator and the most accessible form of independence insurance available to a retiree.

Tom has this pillar but has not yet fully valued it.

Pillar No. 2: Intellectual stimulation

Tom reads the Wall Street Journal every morning. He follows the markets, tracks economic indicators and considers himself intellectually engaged. He is not wrong, but he is missing a distinction that the research makes with precision.

Consuming information is not the same as generating it. For 35 years, Tom's role required him to produce: Analysis, decisions, arguments and strategic recommendations with real consequences. That daily cognitive demand kept his mind operating at full capacity.

Reading is maintenance. The brain grows under novelty and demand, not under consumption and repetition.

A 2025 systematic review confirmed that retirement is associated with measurable cognitive decline because structured cognitive demand disappears. Researchers called the mechanism the mental retirement hypothesis. Passive engagement does not prevent it.

Pillar No. 3: Emotional well-being

Tom's professional relationships were genuine. Over 35 years, he built real trust with colleagues, clients and direct reports. Most have moved to different cities and chapters. His marriage is intact and stable, running on parallel tracks that worked well when his career organized his days.

What Tom lacks is what Harvard's Study of Adult Development, the longest-running longitudinal study of human flourishing in history, identified as the single strongest predictor of health and happiness in later life: The quality of close relationships.

Not the quantity. The quality.

Relationships with real depth, mutual accountability and trust that does not depend on a shared project or a professional context.

Tom has acquaintances. He has a history of relationships. That gap is not a character flaw. It is a planning oversight.

Pillar No. 4: Spirituality

This pillar is the one most likely to be dismissed in a financial planning context and the one most consistently validated by the research.

Spirituality, as the research frames it, is not necessarily religious. It is a connection to something larger than oneself: A sense of meaning, a reason to matter beyond the personal, an answer to why the days are worth living.

Tom's career provided this without his noticing. The company's mission, the team's outcomes and the clients' results gave his work a context that extended beyond his own interests.

In retirement, that context disappeared without a replacement being designed. His days are comfortable and, in a way he has not yet named, purposeless.

Pillar No. 5: Hobbies

Tom golfs on Wednesdays. He enjoys it. The research draws a distinction worth making explicit: Activity that passes time pleasantly is not the same as activity that generates meaning. The difference is whether the outcome matters to anyone, including the person doing the activity.

Golf, in this context, is a placeholder, a reasonable one while a person figures out what comes next.

The hobbies pillar, properly understood, is purposeful engagement that fosters identity and contribution outside professional life.

It is the answer to the question retirement eventually forces on every retiree: Who am I when the job is over, and what do I build with what I know?

This is Tom's shakiest pillar. He has not yet found what replaces the sense of contribution his career provided automatically.

The second checklist

Tom is not unusual. He is representative of the retiree the financial planning industry serves most effectively: Financially prepared, psychologically unprepared and genuinely surprised by the gap between the two.

The five pillars are not equally difficult to build. Most people arrive at retirement with one or two already intact. Tom has exercise. His intellectual engagement is passive and insufficient, as research shows. This is a redesign problem, not a rebuild.

The other four pillars are largely absent. The work is to identify which are missing and to treat that absence as a planning problem rather than a personal failing. Absence is not deficiency. It is a design gap, and design gaps have design solutions.

For Tom, securing the four missing pillars does not require dramatic reinvention. Three commitments cover all four.

The first addresses two pillars at once: A role that demands his analytical skills in a context where he holds no authority, such as a nonprofit board, a civic commission or a mentorship program for young finance professionals. That single commitment restores both intellectual stimulation and purposeful engagement.

A standing social commitment with two or three people who depend on his presence, not merely his availability, addresses a third.

And a question he has not sat with long enough to answer honestly addresses the fourth: What would make the next chapter matter to someone other than himself?

None of these are financial decisions. All of them will determine the quality of the years his financial plan is intended to fund.

The first checklist tells you whether you can afford to retire. The second tells you whether retirement will be worth it. Both are necessary. For too long, only one has been completed.

To learn more about designing a fulfilling retirement, pick up my new book, Your Encore Years: The Psychology of Retirement.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

After several decades as a serial entrepreneur — launching computer magazines in the ’80s and hobby magazines in the ’90s, then running conferences for publishers for two subsequent decades — Carl Landau retired in 2019 at age 64. "I finally felt fatigue," says Landau, who lives in Sacramento, Calif. "I always had so much enthusiasm for it all and realized that I had been doing this for a long time."

That first year of retirement, though, proved challenging. Landau and his wife planned a trip to Portugal for March 2020 — the month and year the world practically shut down thanks to the COVID-19 pandemic. With travel canceled and life on pause, Landau did what entrepreneurs do: He launched a new venture, creating a wry, weekly podcast looking at life and identity post-career that he called I Used to Be Somebody.

Within months, the project had morphed into a second career. "I realized I had built another full-time job," says Landau, adding that he found he had little time to pursue his passion for pickleball, one of the activities he’d most looked forward to in retirement.

So Landau recalibrated again. He scaled back production of the podcast and a companion newsletter to once a month, and he now averages some 12 hours a week at work. The rest of his time is reserved for socializing and recreation (pickleball!). Looking back, he recommends that newbie retirees bake flexibility into their plans to accommodate shifting priorities and unexpected experiences.

"There are going to be ups and downs, particularly if you worked really hard for 40 years and all of a sudden you’re not doing that," he says.

Landau’s story is less a cautionary tale than a template for what comes next, as millions of newly minted retirees are now learning. The post-career years, especially in the beginning, are an ongoing experiment. "No matter how prepared for retirement people are, they are unprepared," says certified financial planner Ross Levin, cofounder of Accredited Investors Inc., a wealth management firm in Edina, Minn.

The impact of "Peak 65"

Thanks to the aging of the massive baby boom generation, the ranks of first-time retirees looking for financial security and purpose in the next stage of life are historically large right now.

Between 2024 and 2027, a record number of Americans will turn 65 or will have already celebrated that milestone birthday, including 4.1 million this year and about the same number next year — a cohort known as Peak 65. All boomers will be at least 65 by 2030.

Many of these freshman retirees understandably face the transition to their next chapter with some trepidation. The percentage of workers who feel confident that they have enough money to live comfortably in retirement fell by 6 percentage points from 2025 to 2026, to 61%, according to a recent survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research.

Among the concerns stoking worries about finances in retirement were inflation, debt, healthcare costs and housing expenses, as well as doubts about the future financial viability of Social Security and Medicare.

Adding to the anxiety: Many near-retirees haven’t spent much time planning for what they will actually do once they’ve put a full-time career behind them. That’s the key takeaway from a 2025 survey by the Financial Planning Association and the Journal of Financial Planning. About half of the financial planners surveyed said their clients were financially prepared to stop working, but only 11% said the people they advise were emotionally prepared for the lifestyle adjustments that retirement entails.

If you’re looking ahead to retiring soon or have recently embarked on the retirement journey, you want to make sure you have both parts of the process covered. Experts recommend these steps to ease the transition from full-time work and to ensure that you flourish in this next chapter.

Rethinking what retirement looks like

Part of the challenge you face as a new retiree is that the definition of this stage of life is changing, as people generally live longer and in better health than previous generations. Yes, the word retirement still typically signifies the end of a long career. But individual paths diverge wildly from there these days.

The classic vision of retirement as full-time leisure and relaxation remains an option. Increasingly, though, many retirees take on part-time jobs, gig work or even encore careers. Some become passionate volunteers or dedicated hobbyists; others go back to school. Some embrace an active role as grandparents or become caregivers to aging loved ones. Often, retirees pursue a mix of these roles that evolves with age.

What’s right for you? The beauty of a long retirement is that you don’t have to figure it all out from the jump or stick with a single vision. It helps, experts say, to view the first year of retirement as a period for gathering information that will help smooth the transition to this next chapter and build a strong foundation — financially, socially and emotionally — for a comfortable, meaningful retirement.

"The first year is a test year," says CFP Lazetta Rainey Braxton, founder of the Real Wealth Coterie, a wealth management firm in New Haven, Conn.

The key, experts say, is to be willing to experiment and to seek out pursuits that offer purpose, keep your body and brain active, and help you maintain social connections. You also need a good idea of how much you can safely spend to make those things happen.

In other words, you need both a purpose plan and a financial plan at the beginning of your first year of retirement. That allows for smarter decision-making and flexibility, helping you adapt as experiences and new data inform your views and the inevitable curveballs come your way.

"If you’re thriving, it’s because you have a personalized vision for what retirement means to you," says Lisa Stornaielo, cofounder of The Future of You, a Boston-based consultancy that helps individuals and corporations navigate the transition to retirement. "Your finances are an important piece.

But what we’ve found is just as important is that people are very clear not only on what they’re retiring from but also on what they’re retiring to, and there’s an intentionality around that."

Treating your first months as a sabbatical

Of course, you’ll need time at first to decompress, exercise, read, and tackle long-delayed home projects or similar tasks. There is immense value in giving yourself permission to relax and enjoy new experiences.

Think of those first few months as the equivalent of taking a sabbatical — a necessary window to recharge mental and physical energies while creating psychological distance from a lifelong work identity.

A sabbatical is temporary; retirement is not. The profound shift in navigating the transition between the working world and retirement comes down to sheer time.

Leaving a full-time career suddenly frees up roughly 2,500 hours each year, calculates executive coach Joe Casey in Win the Retirement Game: How to Outsmart the 9 Forces Trying to Steal Your Joy. "People enter retirement at different ages and with various levels of resources," he writes. "But all new retirees are time-rich."

The core question to ask yourself: How will you invest that newfound wealth of time? What is your purpose? What matters to you? "I encourage people to write some sort of business plan," Landau says. "It doesn’t have to be elaborate. Just list your goals, what you really enjoy doing and the things you don’t like."

Adapting your plan as life happens

Any entrepreneur will tell you that a solid business plan not only increases the odds of success but also accounts for the fact that the blueprint will change multiple times. Take the experience of Joy Norquist, 70, and Ron Wawrzon, 69, who retired — she from a career in insurance compliance, he from working as an operations manager for a small manufacturing company — in 2021 and 2022, respectively.

The Saint Paul, Minn., couple both have pensions, retirement savings and a long-term relationship with a financial planner. They planned to move to Chicago, where Wawrzon is from, but life intervened. Wawrzon faced a health setback (he’s fine now), and Norquist’s mother required months of intensive care following a serious fall. Those initial plans for retirement went on hold.

Meanwhile, the couple discovered part of their post-retirement rhythm almost by accident. One afternoon, for fun, they went to an open house for a condo in a high-rise building in downtown Saint Paul, and they fell in love with the view. The couple moved to the building two years ago. They joined a local walking club, they participate in a weekly study group at a local tavern, and they enjoy movie nights with neighbors and other activities.

Norquist’s mother passed away in late 2024, and the couple spent much of last year dealing with her estate. Now that’s mostly done, but Chicago may no longer beckon and Norquist and Wawrzon are taking their time to decide what comes next for them in retirement. But they view the future with optimism. "We feel like we haven’t really launched yet," Norquist says. "We’re figuring out the rest of our lives from here."

Build your core strategy

As you shift from earning and saving money to spending the fruits of your labor, retirement triggers a cascade of financial decisions, from where to live and how you’ll pay for healthcare to when to start taking Social Security benefits and how much you can safely withdraw from retirement accounts.

Yet only one in four Americans in their sixties has a formal, written financial strategy for retirement, according to a 2025 report from the Transamerica Center for Retirement Studies.

If you’re among them, now is the moment to create a plan — or revisit and update the one you already have. You need realistic data on expenses (needs and wants), liabilities, tax rates and healthcare costs to figure out where you stand and what options make the most sense for your circumstances.

You can work with an adviser (find one at napfa.org, letsmakeaplan.org or garrettplanningnetwork.com) or do it yourself using planning software, such as Boldin (free for the basic version; $12 a month for advanced features) or WealthTrace ($229 a year, standard; $289 a year, deluxe).

Maximize your Social Security payout

Among the most critical decisions to ponder in year one: when to claim Social Security benefits. The earliest you can apply is age 62 and the latest is age 70; the longer you wait, the bigger the monthly payout will be.

For instance, boomers celebrating their 65th birthday this year who wait to file until they hit their full retirement age of 67 — that is, the age at which they’re entitled to 100% of their benefits — will get a monthly benefit that is roughly 43% bigger than if they’d claimed at 62, according to the Social Security Administration. Wait until age 70, and that monthly benefit will be 77% higher than the payout at 62.

Because you can’t outlive your Social Security benefit and the payout is adjusted annually for inflation, the standard advice is to hold off filing for as long as possible — at least until your full retirement age. However, there can be good reasons to claim earlier — if, say, your health is poor, or you’d otherwise need to withdraw too much from savings to pay fixed expenses.

An adviser can help determine the optimal time to claim for your situation, or you can tap online resources for assistance, such as Open Social Security, a free strategy calculator, or planning software such as MaxiFi ($109 a year, standard plan; $149, premier). (For more guidance, see "Perfect Timing: When to Claim Social Security," April.)

Master your portfolio withdrawal strategy

You’ll also need to tackle the puzzle of how much money you can safely withdraw from your retirement portfolio. One common guideline is the 4% rule, developed by retirement researcher William Bengen in the mid ’90s.

It suggests taking out 4% in the first year of retirement (it assumes the portfolio is split roughly 50-50 between stocks and bonds), then adjusting subsequent withdrawals annually for inflation. Historically, Bengen calculated that strategy would ensure you would never run out of money, even in the worst-case scenario for financial markets.

Although the 4% rule is a simple and convenient metric, experience has shown that strictly adhering to it often leads retirees to withdraw less than they can afford to spend, potentially stopping them from enjoying this chapter of life to the fullest. Many experts, including Bengen himself, have revised the initial withdrawal rate upward to the 4.5%-to-6% range.

In his 2025 book A Richer Retirement, for instance, Bengen suggested 4.7% would be a better starting point for withdrawals, and he changed his model portfolio to hold as much as 65% of long-term savings in stocks.

Likewise, CFP Rainey Braxton typically recommends that you withdraw up to 5% the first year — ideally somewhere between 4% and 5% — and possibly a little more, depending on what she calls "the nuance and art of knowing the client’s circumstances."

A popular alternate approach is the bucket strategy, initially developed by CFP and wealth manager Harold Evensky, chair of the Coral Gables, Fla., financial planning firm Evensky & Katz. As Evensky said in a Morningstar interview last year, the strategy was "designed so the client wouldn’t get panicked if the market was falling apart because [they’d know] where the grocery money was coming from."

The basic idea is to set aside enough cash to cover, say, one or several years of living expenses, when combined with Social Security and any other guaranteed sources of income, such as a pension.

Money that you won’t need for several years is then invested in a diversified portfolio of fixed-income securities and equities, which offer the prospect of higher long-term returns but at greater short-term risk. The cash cushion offers peace of mind that you’ll get through the inevitable market slumps without needing to sell depreciated stock or bonds.

Despite the differences between the two strategies, the central takeaway is the same: Spending plans should be dynamic. In essence, the first year of retirement provides a trial run to implement a fluid strategy, allowing you to track your actual lifestyle costs while remaining flexible enough to make adjustments if market or economic conditions or personal priorities shift.

"People think they need to have it all figured out right away," says Andrea Eaton, a CFP at Cornerstone Wealth Advisors in Edina, Minn. "It takes a year to figure out your actual cash needs. It really is a guesstimate initially, and that can be changed up or down. It simply takes time getting used to taking money out versus putting money in."

Discovering your post-career purpose

Newbie retirees often feel unmoored when they are no longer defined by their job and the need to make a living. So it’s important to build a new sense of purpose for your retirement years and have good reasons for getting up in the morning.

"You should be working on what your life will look like before you even retire," Eaton advises. "What is your greater purpose? How are you getting involved in your community? What gives your life meaning beyond working for an income?"

How do you find that purpose now? Stornaielo, who spent 21 years at Fidelity in human resources and executive coaching, warns against getting too caught up in pretentious visions about purpose. She recalls a three-day retreat focused on purpose that she attended while still at Fidelity. The retreat was very serious and high-minded. At the end of it she declared her purpose was to be "the yeast in the bread of life," she laughs. "Whatever that means."

Her purpose mantra now is far simpler and grounded: "Helping people achieve their potential." Also helpful, she says, is not to think of your retirement as the end part of your life. "Don’t get hung up on how much time is left. [The focus should be] what I can do today to feel like I’m making the most of my time."

Finding meaning through community, learning, and giving

For Laura and Ben Cooper, giving back to their community is what’s providing that feeling and sense of purpose in retirement. Laura, 78, a former law professor at the University of Minnesota, became a volunteer teacher in a citizenship program in the Twin Cities when she first retired in 2018.

Along with Ben, 79, a former mathematics professor at Augsburg College in Minneapolis, they’ve since branched out to support a variety of causes that include local arts organizations, environmental groups, nonprofits focused on refugee rights, and their local library system. Freed from the busyness of active careers and raising their now-grown son, they were able to ask themselves, says Laura, "What do we really care about?"

The Coopers manage much of their giving through a donor-advised fund, a tax-advantaged charitable-giving vehicle that works like a personal investment account for philanthropy.

Added benefits of their philanthropic work, they’ve found, are the sense of community and opportunities for continued learning it has given them. They’ve joined outings with Nature Conservancy scientists, attended private theater rehearsals to hear from actors and directors, and learned from experts about international human rights. "Learning is absolutely vital, and we have pretty diverse interests," says Laura.

Conversations with family, friends and acquaintances are a rich resource for thinking about purpose. One technique is to pay close attention to the tasks, conversations and projects that leave you energized rather than drained. Introspection helps, too.

Think back to other major life transitions and see what consistent core values carried you through those shifts. Volunteering, mentoring, taking a course or learning a new skill are activities that also offer useful information.

And some resources can help. Among the books that might provide both inspiration and practical suggestions are: Who Do You Want to Be When You Grow Old? The Path of Purposeful Aging, by Richard Leider and David Shapiro; The Big Shift: Navigating the New Stage Beyond Midlife, by Marc Freedman; and The Second Mountain: The Quest for a Moral Life, by David Brooks.

Evaluating year one to recalibrate year two

At the end of your first year of retirement, Eaton suggests conducting a personal audit.

Ask yourself, What activities brought you the most joy and fulfillment? Which were a waste of time? Are you feeling lonely? Do you need to inject more intentional social interactions, clubs or group hobbies into your life? How is your budget holding up against the reality of retirement? Do you need to scale your spending up or down based on your actual first-year cash flow?

The answers to those questions will help you shape year two of retirement, which in turn will help guide year three. Retirement is iterative by nature — a series of continuous recalibrations. You want to be continuously asking yourself, says Eaton, "What didn’t go well? And how do I want next year to be?"

Know this: Your first year probably won’t look exactly as you imagined it would before you stopped working full-time, and that is perfectly fine. Year one isn’t supposed to be the final draft of your retirement; it is simply the initial run of a grand experiment.

Build a personalized plan with confidence

Retirement is full of important financial decisions, from creating a sustainable withdrawal strategy to deciding when to claim Social Security. A financial planner can help you build a personalized plan with confidence.

Use the Bankrate tool below to connect with a vetted financial planner who can help you create a retirement income strategy that fits your goals:

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Aging in place has its benefits. You can stay in the home you're accustomed to. You're close to friends, family, community, doctors, and caregivers. Plus, you don't have to worry about the headaches and stresses of relocating.

For all those reasons, aging in place is a popular choice for many retirees. How many? According to AARP, 75% of adults aged 50 and older want to remain in their homes and communities as they age.

Remaining in your current home during retirement also presents meaningful financial advantages. Beyond avoiding the considerable expenses associated with a retirement community — which often range from $6,200 to $10,800 per month —there are several less apparent cost savings.

From everyday grocery savings to reduced tax burdens, here are five surprising ways aging in place can protect your nest egg.

(Read our companion story: 5 Unexpected Costs of Aging in Place — Even With No Mortgage)

5 unexpected aging in place savings

1. Cheaper groceries

Eating out can add up, and if you relocate to a retirement community or a new location, you may spend more on meals than if you age in place.

That's because living in a retirement community or assisted living facility usually comes with prepared meals and a set meal plan. Sure, standard meals may be included, but extra meals or guest dining aren't, which can quickly add up. If you live at home, you can cook for yourself, buy food on sale, shop in bulk, and find other ways to save on your groceries.

As for retirees who relocate to a new area, they may spend more money dining out, trying new restaurants in the town as they get a feel for the new neighborhood.

2. Flexible healthcare

Aging in place allows you to control your support costs, saving you serious cash compared to an assisted living facility or nursing home. Instead of paying a steep, flat monthly fee regardless of how much care you actually use, you only pay for what you need. If you require help for a couple of weeks after a fall, you can hire an aide for just that timeframe. If you only need assistance with errands for a few hours a month, you pay solely for those hours.

A non-medical home care aide generally costs $30 to $35 per hour (or $300 to $350 a month) for ten hours of help. Compare that to a full-time facility, which runs $6,200 or more per month, and the savings are substantial. Best of all, the money you aren't spending on a facility can stay invested and continue to grow.

3. Property tax savings

Setting down roots does mean something, even if the younger generations are quick to switch jobs and cut ties. And that loyalty is rewarded for homeowners who stay put in the form of tax breaks that you won't get if you relocate in retirement.

Most states and towns offer some sort of property tax break for residents over the age of 65, whether it's a homestead exemption, senior property tax exemption or a tax freeze. You won't get those immediately if you move to a new home, even if you are over the age of 65. Typically, you must own and live in the property as your primary residence for one to three years before you're eligible.

Staying put means you can collect as much as three years of tax savings, which could amount to hundreds, if not thousands, of dollars in savings.

4. Loyalty and senior discounts

Loyalty pays off, and that's particularly true for retirees who stay put as they age. By remaining in your long-time home, you can get discounts on everything from utility bills to property insurance. Discounts that you might not get if you relocate.

Utility companies tend to offer rate reductions or senior credits to long-term residents, while staying in the same home enables you to keep your policy discounts with your insurer. Staying put also protects you from taking on a brand-new policy at today's inflated market rates. That's good news since homeowner's premiums have jumped nearly 47% nationally over the last five years alone, according to LendingTree.

If you relocate to an area prone to severe weather or natural disasters, like hurricanes in Florida, your homeowners' insurance premiums could soar even higher, wiping out any expected savings from moving.

5. Free support networks

Whether it's close friends, long-time neighbors, or family living nearby, an established support network becomes invaluable as you age, especially if you decide to stop driving. By staying in your home, you can rely on informal favors, like a neighbor driving you to a doctor's appointment or a friend picking up your prescriptions.

If you relocate, a simple trip to the pharmacy or grocery store can easily run $20 or more for a rideshare if you don't have a car or a network of similar help. Relying on private transit services for every errand can quickly add up to hundreds of dollars a month.

Add savings to the list

There is a long list of reasons why people choose to age in place, and saving money isn't typically top of mind. But it is a major added perk, one retirees can comfortably add to their list.

After all, whether it's groceries, home maintenance, insurance, property taxes or support, aging in place offers real savings that go far beyond just avoiding the steep costs of an assisted living facility.

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Aging in place is a popular choice for retirees for good reason. Home is where you raised a family, built a life, and rooted yourself in community. Plus, if your mortgage is paid off, you've eliminated one of retirement's biggest expenses.

However, housing costs go far beyond a mortgage and property taxes. If you aren't prepared, these five hidden costs of aging in place can easily throw your retirement budget off course.

(Read our companion story: 5 Surprising Ways Aging in Place Can Save You Thousands in Retirement).

Five hidden costs of aging in place

1. Home modifications

Aging in place might be as easy as relocating to a main-floor guest room, or it could require a complete architectural overhaul. Before committing, make sure your home is suitable for aging in place, and if it's not — that you can afford the necessary upgrades.

Major modifications such as walk-in showers, wheelchair ramps, and widened doorways can range from $2,500 to over $20,000, and Medicare won't cover them. The last thing you want is to find out after retiring that your hallways can't accommodate a wheelchair.

If you aren't sure whether your home is age-in-place ready, take our quick quiz here. Before you decide, ask yourself these three questions first.

2. Chore tax

Mowing the lawn, cleaning the house, tending to the pool and otherwise maintaining the house may seem easy in the early years of retirement, but as you get older, you may not be up for all that physical labor. Hiring someone for all that home maintenance comes at a cost that can add up.

On average, basic lawn maintenance costs $100 to $500 per month, while pool service ranges from $100 to $350 monthly. House cleaning typically costs $120 to $240 per visit, depending on your home's size.

3. Aging home appliances

From the boiler to the refrigerator, if you are aging in place, chances are, your appliances are too. They may be healthy now, but as they get older, they could fall into disrepair and need replacing, which could set you back some serious cash. Plus, homeowners' insurance won't cover a crack in your oil tank or a refrigerator that suddenly stops working.

How much will you be on the hook if you have to replace an old oil tank? Anywhere from $400 to $6,000, according to Angi. Meanwhile, the average cost to replace an HVAC system is $7,500, based on unit type and home size.

4. Transportation costs

If your home is in the suburbs and you lose the ability to drive, getting around can get expensive. That's particularly true if public transportation is inaccessible in your neighborhood or if you don't have a support network that can shuttle you to and from appointments.

Taking a rideshare or taxi to a doctor's appointment, the grocery store, or to visit friends and family can quickly add up. Spending $20 to $40 per trip, or $300 or more per month just to run errands or get to appointments, will eat into your budget fast.

5. Rising homeowners' insurance costs

Even if your mortgage is paid off and homeowners insurance is no longer required, going without it means you are personally on the hook for any damage. That's why most mortgage-free homeowners keep their policies.

If you plan to age in place with peace of mind, be prepared for rising insurance costs. That is especially true in states like Colorado, Minnesota, and Iowa, which saw double-digit premium hikes in recent years. Nationwide, average rates jumped 6% in 2025 alone

Crunch the numbers before aging in place

Aging in place is the goal for many retirees, and for good reason — your home holds your memories, your routine and your community. But before committing to stay put long-term, take an honest look at what it will take to keep your house safe, functional and comfortable. Running the numbers on these hidden expenses today will help ensure your forever home stays a place of comfort — and doesn't become a financial trap later on.

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Cash is king in retirement, and keeping more of it in your portfolio is always a priority. Fortunately, saving money doesn't always require cutting back. Sometimes it just takes changing how you pay.

By paying certain everyday expenses upfront, you can unlock significant discounts. Monthly payments include processing fees, administrative overhead, and transaction risks for providers, so many reward customers who pay in full, upfront.

From property taxes to annual subscriptions, prepaying these five recurring bills can yield serious savings without altering your lifestyle.

5 everyday bills to prepay now

1. Annual property taxes

Even if you paid off your mortgage, you're still on the hook for annual property taxes, and depending on which state you live in, the price can be hefty. For example, there are 18 states with annual property taxes of $4,000 or more. New Jersey ranks highest with annual property taxes of $7,580.

In some states, including Florida, you get a discount if you pay your annual property tax in a single upfront payment, which eliminates monthly processing fees. In Florida, that discount can be as much as 4%, depending on how early you pay.

2. Lawn care and pest control

Prepaying for lawn maintenance and pest control services can yield about a 5% savings, but it typically locks you into an annual contract.

Before you sign with a provider, make sure you understand the cancellation terms, service guarantees, and auto-renewal clauses. If you use a local contractor, ask if they offer an additional discount for paying the entire year upfront in cash.

3. Streaming subscriptions and memberships

This strategy works best if you are already loyal to your streaming services, warehouse clubs or gym and plan to keep them all year. By switching from monthly billing to an annual plan, you can unlock discounts ranging from 10% to 25%.

Take Amazon Prime as an example: paying $139 for an annual membership instead of $14.99 per month saves you over $40 a year, and that's just one service. Do that with all your subscriptions, and the savings can add up.

4. Dental and elective medical care

If you have the cash, offering to pay upfront for dental or elective care rather than using a payment plan can yield discounts ranging from 5% to 15%.

You have an even bigger advantage if you have a Health Savings Account (HSA). Paying out of pocket lets the HSA balance grow tax-free, and because there is no deadline to reimburse yourself, you can save your receipts and withdraw those funds tax-free later in retirement.

5. Long-term care insurance premiums

Paying insurance premiums annually instead of monthly can yield substantial savings, and long-term care policies are no exception. Most insurers add a 3% to 8% surcharge when you split an annual bill into monthly payments, but writing one check eliminates those extra fees. Depending on your carrier and policy size, switching to an annual payment can easily save you hundreds of dollars each year.

A word of caution

Only prepay these expenses if you have the extra cash on hand. If making a lump-sum payment forces you to sell off investments during a market downturn, you expose yourself to a sequence of returns risk, which can create a retirement shortfall later on. But if you can swing it, prepaying these five everyday bills is one of the easiest ways to unlock hundreds in savings without touching your lifestyle.

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With inflation still hammering retiree budgets, retirees may want to stress-test a simple but powerful benchmark: Can retirees realistically travel (or live abroad temporarily) on $100/day?

The short answer is ‘yes,' but with no shortage of qualifiers and caveats.

"Living on $100 per day would be fairly easy to do as a nomad, since you can easily find an apartment for rent for $1,000 or less per month in dozens of desirable countries, including in capital cities or in beach areas," said Tim Leffel, a travel book writer and author of the book A Better Life for Half the Price.

Leffel’s book covers 19 countries where living on less than $100 per day is feasible, and he says he and his wife now live in Mexico for less than $2,000 per month.

"That's without being at all careful about what we spend," Leffel noted. "We own our own home outright that we're regularly upgrading, but since most people in our city of Guanajuato pay $500 to $900 for rent, we would still be well under $100 a day for two of us even if we rented."

Leffel said there are cheaper places to live than in Mexico, even within Latin America. "Currently, that would include Guatemala, Nicaragua, parts of Panama, Colombia, much of Peru, Brazil, and Bolivia," he noted. Sometimes Argentina too, but it's a financial roller coaster there depending on what the government is up to."

"There are countries in Europe where people are spending far less, like Bulgaria, Albania, Hungary, and Romania," Leffel added.

How to start living abroad on $100 per day

Setting up stakes outside the U.S. for $100 or less per day is more of a mindset than a financial exercise, Leffel said.

"You don’t have to stretch a buck when living abroad," said Leffel. "Your expenses drop in half if you pick the right place."

He said that when in Mexico, for instance, "we go out to eat twice as much, attend more cultural events and don't even ask the prices when shopping for fruit and vegetables. We even have a weekly housekeeper for under $100 per month, for a three-bedroom/two-bath house plus an office."

Adopting that mindset means living like a resident rather than a tourist on a short vacation. "$100 per day may be sufficient for retirement travel if individuals can create a lifestyle similar to what locals live versus a tourist's 7 to 10 day vacation," said travel expert Jiayi Wang, founder of The Diary Of A Nomad.

Wang demonstrates this in Chiang Mai, Thailand, where her daily expenses average around $100. She typically spends $40 on a basic apartment or guesthouse, $20 on local meals, $8 on public transit, $12 on activities like cafes or museums, and $20 on miscellaneous needs like insurance, laundry, and mobile data.

Wang points out that staying longer allows you to spread your costs out over many months, including airfare, initial deposits, and utility setups.

Additionally, using local markets, eating at neighborhood restaurants, taking buses/trains, and renting apartments/homes for a month versus daily hotel rooms are great ways to save a buck when living on $100 a day, Wang said.

Navigating local banking and currency fees

Opening a local bank account abroad typically requires standard documentation: a passport or government ID, proof of local residency or a valid visa. Alternatively, multi-currency digital banks like Revolut or Wise offer easier workarounds for international travel.

ATM and card transactions also carry hidden costs. Swiping cards or making international ATM withdrawals can trigger foreign transaction fees and big out-of-network charges. This is especially the case when using credit cards to make cash advances. To limit these kinds of fees, you should carry a debit card that reimburses foreign ATM fees, including Charles Schwab or Capital One and a credit card that has no foreign transaction fees.

Finally, when a card terminal asks whether to pay in U.S. dollars or local currency, always choose the local currency. That's because choosing your home currency triggers Dynamic Currency Conversion (DCC), in which international banks charge inflated exchange rates and additional fees.

Visa thresholds and exit taxes

One major mistake U.S. retirees make when moving abroad is underestimating visa and residency costs, focusing primarily on airfare and rent.

“U.S. retirees often get surprised by renewal fees, border runs, the required insurance, or banking requirements,” said Dovi Geretz, Chief Technology Officer at SlickTrip, a real-time flight price alert platform. “Those expenses can add up quickly and disrupt even the most carefully planned long-term travel budget.”

Most popular destinations require a retirement or long-term residency visa to stay beyond tourist limits. While these programs attract international retirees, they carry upfront costs: application and legal fees, document translations, background checks, medical exams, and income verification. These requirements can easily add hundreds or thousands of dollars to a budget before signing a lease.

Retirees should also recognize that extended stays can trigger unexpected international tax obligations. Many popular destinations follow the 183-day rule, meaning that if you stay in the country for more than half the year, you may be considered a local tax resident subject to local income taxes in addition to your U.S. reporting.

Certain U.S. tax provisions, such as foreign tax credits, generally help citizens avoid double taxation. However, navigating dual filing requirements takes smart planning. U.S. retirees planning to split time between countries should track their days and work with an international tax specialist to ensure they don't accidentally trigger tax residency overseas.

Make sure to account for healthcare costs

One of the biggest mistakes people make when trying to determine how their retirement dollars will stretch while traveling is failing to include healthcare costs in their estimates.

"Medicare generally doesn’t pay for any medical treatment outside of the U.S.," Wang said. "Travel medical insurance or international coverage must be included in the costs of traveling and should never be considered an option, but rather a required expense."

Generally, travel medical costs are framed by the country where the insurance is needed. For instance, travel insurance in Costa Rica costs about $215 for a 12-day trip.

Medical insurance costs in Thailand, however, clock in at about $96 for the same 12-day trip. Consequently, it’s up to the traveler to determine how much of their $100-per-day budget should be spent on healthcare costs.

Renting longer term can help you save

Being creative about living arrangements can stretch a travel budget.

"Long-term rentals are much cheaper than short-term rentals," said Clay Cary, senior trends analyst at CouponFollow. He said that moving less often reduces transportation and hotel costs. "Therefore, slow travel is always more cost-effective."

Cary also advises living like a local to keep expenses low: shop at neighborhood grocery stores, use public transit, visit free cultural attractions, and eat where locals eat. Travelers often overlook hidden costs such as parking, transit passes, and daily upscale restaurant costs, which add up quickly depending on the location.

Location choice ultimately dictates the budget. As travel writer Tim Leffel points out, a $100-a-day budget goes much further in Southeast Asia than in Central America: "$100 per day would be tough in Costa Rica, but in Thailand, you could budget for it." He notes that in Thailand, you can cover rent, food, transport, entertainment, and healthcare for around $3,000 a month, or roughly $100 per day.

3 travel tips that accommodate a $100 per day budget

Use local transportation whenever possible: Usually, buses, trains, and metro systems are reliable and inexpensive when compared to taxis and rental cars," said Dovi Geretz, chief technology officer at SlickTrip, a real-time flight price alert platform. "Also, retirees who embrace public transit will save money daily and often experience destinations more authentically than travelers staying inside tourist bubbles."

Always choose destinations where healthcare is affordable and accessible. Many retirees underestimate how quickly medical costs can affect a travel budget.

"That’s why countries with quality private clinics, lower prescription prices, and affordable travel insurance options can help retirees protect both their health and long-term financial stability when overseas," Geretz said.

Eat where the locals eat, rather than rely on tourist districts or international chains: For inexpensive yet fun dining experiences, look for street markets, family-owned cafes, and lunchtime specials, as they often offer fresher food at a fraction of resort prices.

"Retirees who shop locally and occasionally cook at home can dramatically reduce daily expenses, all while enjoying a more immersive cultural experience," Geretz added.

Avoid these travel budget mistakes: Often, U.S. retirees overpay when moving abroad because they insist on having amenities they are used to at home, such as dishwashers or dryers, buying unneeded health insurance despite low local medical costs, or maintaining a car in walkable cities with cheap transit where a cross-town taxi might cost $4 and a bus just $0.50, Leffel said.

Phone charges can also break your budget. "An immediate and easy way that retirees can save each month significantly is evaluating their cell phone plan," said Thad Hwang, Founder and CEO of Goji Mobile.

Most Americans overpay by staying with mainstream carriers that hike rates or by buying excess data. Switching takes minutes, can save you $70 to $100 monthly without affecting coverage, and frees up more cash, Hwang noted. Additionally, many carriers now offer international roaming packages directly on existing lines, eliminating the need for third-party eSIMs while traveling.

Remember you're not on vacation

Perhaps the biggest mistake in living abroad on $100 per day is treating relocation and traveling as a permanent vacation.

“Many people underestimate how fast the budget can be eaten by restaurant meals, transportation, tours, and accommodation in hotels,” Cary said. Another error is failing to calculate additional fees, including taxes, resort fees, parking, and travel insurance.

“Retirees tend to move too frequently,” Cary said. “Flying and relocating every couple of days increases the overall expenses by two times. Those who spend more time in the same place get a better value for their money."

What does $100 per day buy retirees abroad?

Methodology: Estimated budgets are based on housing costs from Numbeo and Expatistan, health insurance estimates from international insurers including Cigna Healthcare and Allianz Partners, and retirement guidance from the U.S. Department of State, International Living and the Social Security Administration regarding overseas benefits. Costs are representative mid-2026 estimates for a single retiree renting a modest one-bedroom apartment and will vary by neighborhood, exchange rates and lifestyle.

Why retirees like it

• Relatively inexpensive private healthcare 
• Established expat and retiree community 
• Low-cost public transportation and dining 
• Long-standing retirement visa options

Hidden costs

• International health insurance premiums typically increase substantially after age 65. 
• Retirement visas require financial documentation and periodic renewals. 
• Flights to and from the U.S. can significantly affect annual spending. 

Primary sources: Numbeo; Expatistan; International Living; Cigna Healthcare Global; Allianz Partners; Thai immigration guidance.

Why retirees like it

• High-quality healthcare system 
• Safe communities and reliable infrastructure 
• Well-developed transportation network 
• Residency pathways available for qualifying Americans 

Hidden costs

• Housing costs in Lisbon and Porto have climbed sharply in recent years. 
• Rental inflation has outpaced overall inflation in many coastal markets. 
• Residency, taxes and healthcare planning can increase total costs. 

Primary sources: Numbeo; Expatistan; International Living's Global Retirement Index; Portuguese government residency guidance; OECD housing statistics.

Why retirees like it

• Close proximity to the U.S., making family visits more affordable 
• Large English-speaking retiree communities 
• Lower housing costs than many U.S. retirement markets 
• Well-developed private healthcare system in many cities 

Hidden costs

• Medicare usually does not pay for healthcare outside the U.S., so retirees must buy private insurance, local coverage, or pay out of pocket.
• Buying property near the coast or an international border requires setting up a bank trust and paying fees.
• Residency visa requirements and renewal fees are increasing.

Primary sources: Numbeo; Expatistan; International Living; U.S. Department of State country information; Centers for Medicare & Medicaid Services guidance on overseas coverage.

Note: These estimates represent moderate lifestyles for a single retiree renting locally in mid-2026. Actual costs vary based on exchange rates, housing choices, healthcare needs, and travel frequency. They are intended as planning estimates rather than fixed budgets.

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Most "America 250" travel guides will point you toward the crowded, cobblestoned streets of Philadelphia or Boston — and while those historic hubs certainly earned their place in the history books, the true American story doesn't end at the original 13 colonies. If you are looking to give your grandchildren a deeper sense of the nation's heritage, the best classroom isn't a packed museum line; it's the open road.

These four itineraries trade predictable monuments for sweeping coastlines, ancient mountain passes and hidden historic stops, offering a compelling backdrop for passing down stories and building memories.

Out West: the Pacific Northwest & the corps of discovery

Trace the final leg of the expedition that reshaped America: a road trip following the Columbia River Gorge from Portland to Astoria's Fort Clatsop, ending where Lewis and Clark first saw the Pacific at Cape Disappointment.

The route: Portland to Columbia River Gorge to Astoria (Ft. Clatsop) to Cape Disappointment

Columbia River Gorge: Drive past stunning waterfalls and stop at the Columbia Gorge Discovery Center to learn how the expedition navigated these treacherous waters. The Columbia Gorge Discovery Center’s Raptor Program is capable of wowing kids and adults. You can visit the enclosure of resident bald eagles Liberty and Ferguson, ages 17 and 23 respectively, for free.

Lewis and Clark National Historical Park (Fort Clatsop): Located in Astoria, Oregon's oldest city, is a replica of the log fort where the expedition spent the brutal winter of 1805–1806. Kids can interact with rangers dressed in buckskins, try their hand at making candles from tallow and explore the dense coastal rainforest.

Cape Disappointment State Park: Cross into Washington to see where the expedition finally saw the Pacific Ocean. The dramatic clifftop lighthouse is unforgettable. It's still in use and open for tours. Visitors can also wander through the ruins of World War II-era bunkers and coastal defense batteries.

• Summer bonus: Chasing waterfalls & picking berries. Summer brings long, gloriously sunny days to the Pacific Northwest. Stop at the 620-foot Multnomah Falls and hike without needing a rain jacket. Take a detour through the Hood River Fruit Loop, where the kids can pick fresh berries and cherries.
• Fall bonus: The salmon run & coastal mist. October brings the legendary salmon runs to the Columbia River. You can visit the Bonneville Lock and Dam to watch thousands of massive salmon leap up the underwater "fish ladders." Plus, the coast at Cape Disappointment gets its signature dramatic, misty autumn aesthetic.

The South: The southern campaign & Overmountain victory (North Carolina & South Carolina)

While the Northeast gets the credit for 1776, the Revolutionary War was actually won in the South. This trip blends rich Southern history with the spectacular background of the Great Smoky Mountains. The Carolinas are hosting extensive "SC250" and "NC250" events, featuring large-scale autumn encampments and live blacksmithing.

The route: Charlotte (NC) to Kings Mountain to Cowpens (SC) to Asheville (NC).

Kings Mountain & Cowpens National Battlefields: These two parks preserve the sites of back-to-back American victories. The Kings Mountain State Park visitor center offers an interactive junior ranger program that explains how frontier "Overmountain Men" turned the tide of the war. Cowpens National Battlefield commemorates a decisive battle in the Revolutionary War, which ended in defeat for British forces under General Charles Cornwallis.

The mountain finish: End the trip by driving into Asheville to experience the lush greenery in the summer and peak foliage of the Blue Ridge Mountains in the fall.

• Summer bonus: Lake Lure & mountain streams. Beat the Southern summer heat by sliding into the cool, mountain waters. You can stop at Lake Lure (where Dirty Dancing was filmed) for a beach day surrounded by green mountains, or take the kids gem mining and tubing down the French Broad River.
• Fall bonus: Peak Blue Ridge foliage & reenactments. October is the absolute pinnacle for leaf-peeping in Asheville. Additionally, early autumn is when the park service hosts the Overmountain Victory Trail celebrations, featuring massive living-history encampments where volunteers walk the exact path the frontier militia took to the battlefields.

The Southwest: a crossroads of cultures

To truly celebrate the American tapestry for America 250, look to the Southwest, where Indigenous, Spanish and Anglo histories collided to shape the nation. Long before the first bricks of the thirteen colonies were laid, these high-desert landscapes were home centuries of rich cultural exchange.

The route: Albuquerque to Santa Fe to Taos

The Santa Fe Plaza: Celebrate America's diverse roots in the oldest capital city in the U.S. Families can explore the Palace of the Governors, part of the New Mexico History Museum, and buy authentic jewelry directly from Native American artisans under the portal.

Pecos National Historical Park: Just outside Santa Fe, this park features the ruins of an ancient Pueblo village alongside a 17th-century Spanish mission church, right on an old Santa Fe Trail trade route. It brilliantly illustrates the centuries of history that predated 1776.

Taos Pueblo: Take a day trip to a living Native American community that has been inhabited for over 1,000 years. Located at the base of the beautiful Sangre de Cristo Mountain range, this National Historic Landmark is open on weekends only from 9 am to 4 pm. If you've got an American Girl Doll fan, you can visit the Hacienda de los Martinez, which was the inspiration for the doll Josefina Montoya's home. It's a seven-minute drive from downtown Taos.

• Summer bonus: Santa Fe Indian Market & alpine hikes. While lower elevations are hot, Santa Fe and Taos are at high altitudes and stay quite comfortable. (For those who might be sensitive to altitude, keep in mind that you may need time to acclimate.) August brings the world-famous Santa Fe Indian Market, a celebration of Native American art, music and food. You can also take the chairlift up Taos Ski Valley for high-alpine summer hiking.
• Fall bonus: The balloon fiesta & roasting chiles. Early October features the Albuquerque International Balloon Fiesta, when hundreds of hot-air balloons fill the sky at dawn. The smell of autumn, and the official "state aroma", in New Mexico is the aroma of fresh green chiles being roasted in giant tumbling drums on every street corner.

The Midwest: innovation, labor & The Great Migration (Illinois & Indiana)

The trip through the Midwest tells the story of how America transformed from an agrarian society into an industrial superpower. Taking a road trip through Illinois and Indiana reveals the grit, innovation and diverse voices that built modern America.

The route: Chicago (Pullman) to Indiana Dunes to Fountain City (Coffin House) to Indianapolis

The Pullman Centennial: Visit the Pullman National Historical Park, a preserved 1880s company town that highlights the American labor movement and the pivotal role of the African American Pullman Porters.

Indiana Dunes National Park: Just across the state line, hike towering sand dunes framed by brilliant oak trees, celebrating America's conservation and National Park legacy. As part of their "The 1966 Hiking Challenge," the park is offering 19 weekly ranger-led hikes every Saturday at 8:00 am through August.

The Indiana State Museum (Indianapolis): They are hosting dedicated America 250 programming, including exhibits on the Underground Railroad in the Midwest, showcasing the region's commitment to freedom and human rights.

The "Grand Central Station" legacy: This unassuming brick house in Fountain City, Indiana, is where Levi and Catharine Coffin helped more than 1,000 freedom-seekers escape to safety. It's arguably the most successful "station" on the entire Underground Railroad.

They have an interactive visitor center next to the historic home that does a fantastic job of translating this heavy history into digestible, moving stories for children. You can tour the home and see the internal hiding places, including a hidden upstairs closet where entire families were concealed behind furniture, and a basement kitchen built with a secret indoor well so neighbors wouldn't see the Coffins hauling extra water for guests.

• Summer bonus: Lake Michigan beach days. This history trip can turn into a legitimate beach vacation. Indiana Dunes National Park features miles of sandy beaches and warm lake water that feels like the ocean without the salt. In Chicago, you can take a boat cruise down the river to stay cool.
• Fall bonus: Apple orchards & haunted trails. The drive from the Indiana Dunes down to the Coffin House takes you right through Indiana’s agricultural heartland. Stop at Huber's Orchard or Tuttle Orchards for fresh apple cider slushies, pumpkin picking and corn mazes. Additionally, Indianapolis hosts fantastic historic autumn ghost tours that weave local history with spooky seasonal fun (best for older kids or teens).

More on America's 250th Birthday

• America's Cost of Living at 200 vs 250: How Affordable is American Life Now?
• America at 250: The 3 Economic Headaches That Haven't Changed Since 1976
• How Has Retirement Changed in the Last 50 Years? Take Our Quiz
• Financial Advice From America's Founding Fathers
• Which Presidents Are on the Social Security Payroll?

Think you need $1 million or more to retire happily? You're not alone. Northwestern Mutual's 2026 Planning & Progress Study found that Americans think they need $1.46 million to retire comfortably. High-net-worth Americans think they need even more — an average of $2.67 million. Meanwhile, conventional wisdom says you should save at least 10 times your annual salary.

But here's the reality: many retirees do just fine with far less.

You don't have to spend your entire working life chasing a seven-figure benchmark. Combined with Social Security and smart estate planning, a retirement fund of $300,000 to $400,000 is often enough to enjoy a comfortable, stress-free retirement.

Matt Twiford, fractional CFO and Managing Director of the Pegacom Group LLC, notes, "While it would be nice to have $1 million in retirement, not having it doesn't mean you can't enjoy a good quality of life and feel somewhat financially free."

Here are 6 practical reasons why a "modest" retirement fund may be more than enough to be happy in your golden years.

1. Keeping your spending in check prevents lifestyle creep

On average, Americans have roughly one year's worth of their current annual income saved in tax-advantaged accounts. For most households, that figure hovers around $80,000, according to a SmartAsset study. That's far less than $300,000 and worlds away from the magic number of $1.46 million. Other surveys suggest that only about half of retirees have any retirement savings at all.

Even so, retirees who paid off their mortgage years ago and have annual expenses of about $45,000 to $50,000 avoid the stress that can come with maintaining a more extravagant lifestyle — or lifestyle creep (increased spending on non-essentials and making luxuries feel like necessities).

Paying down or paying off a mortgage and resisting expensive vehicles and gadgets can save thousands over time and make a happy retirement possible even with limited savings.

2. Moving to a lower-cost area can stretch your retirement dollars

Location plays a big role in retirement finances. Living in high-cost states such as Hawaii, California, New York, or Massachusetts takes a much bigger bite out of your budget than living in places such as Tennessee, Arkansas, Oklahoma, or Missouri. Choosing a lower-cost state frees up more money for travel, family, or charitable giving, rather than sinking more cash into housing, taxes, utilities and healthcare.

“My advice would be to start by evaluating where you are and what you have,” says Twiford. “Many retirees own their home outright and have little if any debt, along with a large Social Security check. That's great if that's the case. Others may rent and have few assets, but hopefully some funds from Social Security coming in. Regardless of where you are, analyze it honestly and be truthful with yourself.”

3. Social Security and savings can provide a steady base income

As of 2026, the average monthly benefit for retired workers is approximately $2,071, or about $25,000 annually. While that's a good number, it's probably not enough to live on each month for most people. However, a couple with combined benefits of $40,000 to $50,000 per year only needs about $20,000 to $40,000 from savings to reach a $60,000 to $70,000 lifestyle.

For example, claiming $2,000 per month in benefits at age 62 with a life expectancy of 87 yields $600,000 over your lifetime. But because Social Security payouts grow the longer you delay, waiting until age 70 boosts your annual benefit by roughly 80% compared to starting at 62.

4. Low-risk investing can generate a reliable income

Generating income from investments while also preserving hard-earned savings is key, especially for those with a modest retirement fund. When savings are limited, low-risk investments are often the smartest move. That's because protecting your principal takes priority when you don't have time to recover from market losses.

Most financial experts recommend taking a more conservative investment path as you near retirement. Instead of risky, higher-yield investments, consider low-risk investments, such as bonds, Treasury notes, money market funds, fixed annuities, and CDs.

Robert Laura, retirement expert and co-founder of Retirement Coaches Association, suggests considering preferred stocks, another asset class that doesn't get much attention but can put more income in a retiree's pocket. Preferred stock can be particularly helpful to a retiree with a more modest nest egg. "For example, the iShares Preferred and Income Securities (PFF) ETF currently yields over 5%."

While it's true that all investments carry some level of risk, low-risk assets are typically less likely to fail.

5. Planning for healthcare costs now removes one of retirement’s biggest threats

A healthy 65-year-old woman can expect to spend around $340,000 on healthcare over the course of her lifetime. A 65-year-old man can expect to spend about $297,000, according to Milliman's 2026 Retiree Health Cost Index.

Those figures assume the person has original Medicare, Medicare Part D for prescription coverage, and a Medigap Plan G supplement plan. However, these figures do not include long-term care, which can easily add up to six figures. Unfortunately, most retirement plans can't cover a bill of that size.

"Max funding an HSA can help reduce these costs and thus withdrawals from an IRA or other investment accounts," says Laura of Retirement Coaches Association. "Additionally, allocating funds to a Roth IRA for this purpose, since they come out tax-free in retirement, can also play a role in reducing taxes on distributions. It's also worth noting that some large companies do offer health care to part-time employees."

Also, by taking care of your health, getting routine tests and screenings (many covered by Medicare), getting recommended immunizations, and practicing healthy habits, like not smoking, you can enjoy a higher quality of life and stretch your retirement savings even further.

6. A cash buffer helps during tough times

Life happens. Whether it's unexpected car or home repairs, a health issue, or rising inflation, things don't always go as planned. That's why retirees with more modest lifestyles usually keep a three- to six-month supply of cash in an emergency fund to cover living expenses — just in case.

Having a little extra cash on hand helps create a financial buffer that can keep you afloat without relying on credit cards or high-interest loans.

According to NerdWallet's April 2026 savings report, nearly half (45%) of Americans surveyed said they are actively saving money in a bank account for emergencies. Since an emergency can happen at any time, it's probably best to put your emergency fund in a high-interest savings account for easy access rather than a long-term investment fund.

Why a "modest" retirement fund can be enough

In the end, a "modest" retirement fund can be more than enough to be happy. By focusing on smart habits around spending, investing, saving and everyday life, you may discover you already have more than enough to live comfortably.

The real secret isn't a massive nest egg. Instead, it's having the freedom, flexibility and peace of mind to enjoy all of the years ahead. After all, your retirement shouldn't be only measured in dollars, but by how well your money lets you live the life you actually want.

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Retirement is supposed to be carefree and financially predictable, but that doesn't mean you're exempt from recurring bills. That's particularly true if you own a home. Everything from maintenance to insurance comes at a cost. How you pay those bills — all at once or over time — can have a big impact on your savings and cash flow.

The secret to saving money is timing. Some annual expenses offer discounts if you lock them in early, while others are best kept flexible so you can shop around or keep your money earning interest.

To help you figure it out, here are four everyday bills you should wait to pay to save some serious cash.

4 bills retirees should not prepay

1. Heating oil

For retirees who value predictability, locking in heating oil rates ahead of winter provides peace of mind amid volatile energy markets, but they typically pay extra for that relief.

A fixed-rate plan locks in your price for the entire season, protecting you from cold-weather price spikes. But you won't benefit if market prices drop. A capped-price plan sets a ceiling and lets you pay lower rates if prices fall, but dealers usually charge an upfront protection fee for that option.

The cheapest option, according to nonprofit consumer energy groups and state agencies, is a floating-rate plan. With that, you pay the current market rate and that's it. Over multiple years, those savings can add up.

2. Electricity

Just like heating oil, you can lock in your electricity rate for the year, but doing so can cost you if electricity rates decline.

Plus, you have to be careful of the fine print when signing up for a fixed-rate electricity contract. Some may have early termination fees, monthly recurring charges, and promotional rates that spike once the initial period expires.

3. Auto and homeowners insurance

Who doesn't love the convenience of auto-renewal for auto and homeowners insurance? It's one less thing to worry about, and doesn't loyalty always pay? It turns out it's better to shop around each year to ensure you're getting the best rates.

How much can you actually save? According to a LendingTree survey, drivers reported saving at least $100 per year simply by switching auto insurance providers.

Use the Bankrate tool below to connect with auto insurance providers and compare quotes:

4. Home warranty contracts

Home warranty contracts are supposed to protect you from expensive repairs. For a fixed annual fee, you won't have to worry if the furnace dies, a pipe bursts or the AC is on the fritz. Often, you get high service call fees, strict restrictions on what is covered and exclusions hidden deep in the fine print.

Instead of locking up money in a warranty contract that will require you to pay out of pocket anyway, put it in a high-yield savings account where your cash earns interest until it's needed for a repair.

Keep control of your retirement

Cash is king; it couldn't be truer in retirement, which is why patience pays off when it comes to some everyday expenses.

By shopping around annually and keeping your cash accessible in high-yield savings, you'll ensure your money stays liquid and under your control.

Use the Bankrate tool below to search for today's top high-yield savings account offers:

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When Jude and Matt Bell got engaged, they faced their first major argument: minimalist or floral dinnerware? As a money-management writer, Matt notes that these small decisions often reveal deeper differences you bring into a marriage.

After decades of disagreements, you’d think couples would have mastered the art of compromise by retirement age. Alas, that doesn’t seem to be the case for many. Studies show that more than one third of divorces today occur between people 50 and older — what’s often called "gray divorce."

The good news, financial experts say, is that the same money decisions that strain a marriage can also strengthen it. While money might not buy a happy marriage in retirement, these financial moves can help keep partners aligned.

1. Build a plan that you both believe in

What works best to keep couples together might not be found in a therapist’s office or in the bedroom. Rather, it sits on a printed page or screen.

"One of the biggest things that keeps couples together in retirement is having a financial plan they both understand and believe in," says Nathan Sebesta, CFP® and founder of Access Wealth Strategies.

The confidence a plan provides is measurable. According to Fidelity’s 2026 State of Retirement Planning study, Americans with a financial plan in place are more than twice as likely as their peers (83% vs 38%) to feel confident about their retirement prospects.

Bell agrees a plan is invaluable, especially when spouses disagree about how quickly to spend down their savings, and says it’s often worth working with an adviser who can bring objectivity.

"The ideal is to create a plan where your agreed-upon lifestyle needs are met for the rest of your lives," he says.

2. Go on a 'money date'

A plan only works if couples keep talking. Talking about money, specifically, is something many couples avoid. The Fidelity Investments Couples & Money study found that 49% of couples steer clear of financial conversations to head off arguments.

Bell’s fix is what he calls "money dates." "Get out of the house and away from all the distractions, and then talk about money," he says. "What’s working? What isn’t working? What would you like to pursue, and what will it take financially to get there? Establishing the habit of talking about money will be so good for your marriage. It’ll keep you aligned and working as a team."

3. Talk about what money means, not just what it costs

As with the artistic design of dinnerware, what couples argue about is often deeper than the dollars.

"One of the biggest mistakes couples make in retirement is assuming they’re arguing about money when they’re actually arguing about what money represents," says Laura Mattia, author, CFP® and financial adviser at Wealth Enhancement. "One spouse’s desire to spend may reflect a desire for experiences, freedom or making the most of healthy years ahead. The other spouse’s reluctance to spend is often rooted in a need for security and fear of becoming financially vulnerable later in life."

The healthiest couples, Mattia says, don’t start by asking, "Can we afford it?" They start by asking, "What are we each trying to accomplish?" As she puts it: "The breakthrough happens when couples stop debating the money and start discussing the values and fears underneath it."

4. Commit to full transparency

A potential relationship killer at any stage of marriage is financial infidelity. Many people take it seriously: a Bankrate survey found 43% of U.S. adults believe keeping financial secrets is at least as bad as physical cheating. Yet, nearly half of couples admit they don’t know everything about their partner’s finances.

Sebesta advocates for complete transparency, though he points out that the financial accounts themselves matter less than the openness. "You don’t have to combine every account, but both spouses should know where everything is, how the household finances work and what happens if something happens to the other," he says.

5. Build in financial margin and agree on how fast to spend it down

"How fast do we spend this down?" can become a major marital question in retirement. One spouse wants to enjoy the money now; the other fears outliving it. Even couples who've saved diligently can find themselves at odds over how to enjoy it. A Western & Southern Financial Group survey found just 43% of married Americans completely agreed on what retirement would look like.

Bell’s antidote is margin, a gap between income and essential expenses. Living primarily on one income early in his marriage created that cushion, and the same principle carries into retirement.

"For anyone planning for retirement, build margin into your plan," he says. "That means creating a plan that doesn’t require everything to go perfectly. That’ll keep stress low and flexibility high."

But he cautions against being so conservative that couples miss out. "You don’t want to run out of money, but you also don’t want to die with so much in reserve that you missed out on some things that would have mattered to you," he says. One approach Bell favors is "giving while you're living," such as helping adult children with a down payment on a home so you get to enjoy watching the impact.

Mattia frames the balancing act as a shift in perspective. "Common ground emerges when couples stop treating retirement as a purely financial transition and start treating it as a life transition," she says.

6. Invest in purpose and in the marriage itself

Retirement can strip away a major source of identity and structure: work. One peer-reviewed study found that fully retired people reported a significantly lower sense of purpose than those still working or partially retired.

Bell calls lost purpose "a huge factor" in late-life struggles. His advice is to decide, before retiring, how you’ll continue to use your skills and passions. "Just because you’re no longer drawing a paycheck doesn’t mean you're not needed," he says.

The same intentionality applies to the marriage itself. "If you want to be good at marriage, do the same," he says. "Go on a marriage retreat. Read books about marriage together." He points to research suggesting that couples can get the most joy per dollar from spending on shared experiences.

Catherine Valega, CFP® and adviser at Green Bee Advisory, suggests couples map out those experiences deliberately. Do the ambitious travel while you have the energy, she advises, and plan and budget for how you’ll want to spend time with family as you age.

"Think of retirement as a starting line, not an end line," she says. "You could be spending 40 years in this phase of life."

In the end, a lasting marriage is built on navigating decisions large and small, right down to the pattern on the plates. Whose turn it is to wash those plates, on the other hand, is one problem money will never solve.

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When Serena Williams stepped away from tennis in 2022, she very deliberately said, writing in Vogue (paywall), that she "never liked the word 'retirement.' "

"Maybe the best word to describe what I'm up to is 'evolution.' I'm here to tell you that I'm evolving away from tennis, toward other things that are important to me," she wrote, in what served as her announcement that she was, at least temporarily, leaving the profession.

She said she was making the move because she wanted to grow her family, and, as a woman, she couldn't do that without impacting her career. She also said she was interested in trying other work, such as venture capital. With that very specifically worded announcement, Williams left her industry — with the door still open for her to return.

In the four years since then, Williams did exactly what she said she would. She had a second child and ramped up her work with Serena Ventures, her investment firm. When she wanted to, she went back to that door she'd left open, accepting a wildcard to play at Wimbledon this summer.

With that, she established what I'll call the Serena Williams Rule of Retirement: Rather than plan a black-and-white retirement, plan to give yourself options.

Let your career 'evolve'

When you've spent decades building and prioritizing your career, the idea of one day abandoning it can seem terrifying and almost nonsensical. That's true even if you've already ascended to the C-suite and built up a more-than-sufficient nest egg.

"Why are we stressing out like that?" said Pam Krueger, founder and CEO of Wealthramp and a Kiplinger contributor. "Instead, have you ever seen a dimmer switch? Forget the on-and-off; it's a dimmer switch. And that's what Serena is doing, that's what her rule is, that's what she's teaching us."

This is largely why Krueger, a financial literacy advocate, urges people of all ages to "stop planning for retirement" and instead plan for optionality.

It's easy to say that of course, Serena Williams can wave a magic wand for a Wimbledon wildcard and do whatever she wants after ascending to the top of her industry and making many millions of dollars. But what about us mere mortals?

Optionality means keeping multiple paths open. You might choose a phased retirement, in which you gradually scale back your hours, take on part-time work, or accept "fractional" C-suite roles (pay wall).

Maybe you want to shift industries or work part-time on a passion project, which can mean anything from mentoring younger professionals to working as a handyman after decades in corporate life. You could even start a new venture, whether that's launching a consulting business or selling handmade crafts.

Giving yourself these options requires both a mindset shift and practical planning. A "mindset shift" sounds easier, but in practice, this might be the harder part. We are hardwired to believe the story that you work a career for a few decades, then retire, never to do anything productive again.

That's why having an icon such as Williams set an example is so important, because it can challenge how we, as a society, think a career path should go.

How optionality leads to a happier life

There are many reasons why giving yourself options, rather than restricting yourself to "retired" or "not retired," can make your life easier and happier.

1. Save your savings. On the practical side, picking up some work after you stop working full-time, even if you're making a fraction of what you made, means you don't have to dip as much into your savings. That leaves more of your nest egg untouched, allowing it to stay invested and keep growing.

"The physics of money are that the more you can leave the biggest chunk of money in your retirement account to draw down less at the beginning of those years, the more you're allowing the compound interest to work for you," Krueger said.

Working a little can save your savings in other ways. Serena's sister, Venus Williams, for example, has also never formally retired and plays tournaments a handful of times a year. Last year, she half-jokingly said during an on-court interview that she "had to come back for the insurance." Jobs, even part-time ones, can provide benefits such as healthcare that can preserve your savings a little longer.

2. You give yourself purpose and fulfillment. After retiring, some people become depressed or discontent because they feel that they're no longer contributing to the world. By picking up some work or staying connected to your past industry, you can maintain that feeling of purpose and accomplishment.

3. Make use of your skills. You spent years building up skills that can be applied in different ways. Serena Williams, for example, was obviously an athlete, but at the same time, she was learning the ins and outs of investment as she was seen as an investment by sponsors. She then applied that experience to the venture capital world as an investor herself.

The skills and expertise that you gained don't have to disappear once you step back from your 9-to-5. You can find other ways to use them. This is also a way for you to show respect for yourself and trust in your years of experience.

4. Learn something new. Many studies have shown that learning new things makes people happier. By trying out something different in your later years, you give yourself opportunities to keep stretching your brain, which will make you happier.

Returning to your industry

Maybe, as did Williams, you want to leave yourself the option of returning after you leave full-time work. Here's what to keep in mind:

• Don't burn your bridges. Ensure you're respectful as you walk out the door.
• Nurture your relationships. If you had regular golf outings with colleagues, maintain those, within reason. Make time for occasional phone calls with people in your network. These steps will ensure that if the right opportunity arises, the people who are still there will have you in mind.
• Be open about continuing work. Make it apparent that you're still open to picking up work. Sometimes that's as simple as saying exactly that when you talk to former colleagues, or, if you're doing part-time or side gig work, sharing stories about it on a network such as LinkedIn. (In Williams' case, that was sharing videos of herself on courts with her family.)
• Don't expect immediate triumph. If you do return to your old work, manage your expectations. People are often brought back to manage times of crisis or to hold a boat steady between leadership, such as an interim executive. Sometimes triumph is simply keeping a ship afloat. Sometimes, as with Williams at Wimbledon, the triumph is in showing up and showing it can be done.

Don't be surprised if returning to the office is a little more intimidating than you remember. Environments change and turnover happens. Just remember that you were brought back because the company or industry feels you have something to offer. Carry that confidence with you, along with an open mindset regarding changes that occurred after you left.

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It’s easy to see why Florida is a haven for retirees. Between the year-round warm weather, miles of coastline, and zero state income tax, the Sunshine State is already home to roughly 5 million people 65 and older.

However, relocating doesn't guarantee a lower cost of living, even for those moving from high-cost northern states. Unforeseen expenses in Florida can easily derail an otherwise solid retirement budget.

"Florida is great because there is no income tax," says Andy Smith, a certified financial planner at Edelman Financial Engines. "But people have to look at the total cost of living instead of focusing on one particular tax advantage."

From HOA fees to hefty insurance premiums, before you make the move, be sure to budget for these unexpected expenses.

1. Sky-high HOA fees

Whether you live in a condo or a community, homeowner's association fees are a fact of life in many Florida communities, and that fee can get expensive.

Florida leads the U.S. with the most expensive HOA fees, with seven of its cities charging the highest HOA fees, according to Realtor.com. Take Miami, for one example. The owner of a $425,000 home in Miami pays $617 a month in HOA fees.

2. Surprise condo special assessment fees

Ever since the 2021 collapse of the Surfside condo in Miami, Florida, associations with buildings three stories or higher are subject to mandatory structural inspections and must have fully funded reserves. When condo associations don't, they can charge unit owners a one-time special assessment.

"Many of these buildings are quite old," says John Gillet, CEO and founder of Gillet Agency. "You should thoroughly investigate the condo before making a financial move."

If you can't get a sense of how the condo association is run, what the financials look like and the structure of the building and the unit, you should hire a consultant to research before buying, Gillet said. An assessment fee, if ever required, can range from a few hundred dollars to tens of thousands of dollars.

3. Rising insurance premiums

Expect to pay more than the national average for insurance in Florida, whether it's homeowners, health, or auto. That's across the board in the state, and even higher in certain metro areas. "Insurance is very, very expensive," says Michael Cabanas, a regional managing director at Fiduciary Trust and a longtime Miami resident. "If you live in a flood zone, flood insurance is required by law, and it's not cheap." The same goes for auto insurance. Florida is among the costliest states for auto insurance, according to a U.S. News & World Report ranking.

4. Year-round utility bills

Florida electricity rates are below the national average, but residents' monthly utility bills are among the highest in the country. The reason? Year-round heat and the need to stay cool.

"Instead of two or three months, you pay for eleven months out of the year," says Cabanas. "That's an expense some northeasterners may not anticipate when they move down here."

5. Lack of caregivers

Supply and demand are on display in Florida when it comes to caregiving. As retirees flock to the state, demand for caregivers is rising, driving up the cost of care. In fact, Florida ranks last in caregivers, with just 17 personal care and home health aides per 1,000 adults aged 65 and older. That compares to the national average of 65 per 1,000, according to America's Health Rankings.

6. Property tax resets

Florida caps annual property tax assessments for existing homeowners at 3%, but when a retiree buys a home, that number resets to the market rate. When they get their tax bill in year two, homeowners could be in for a big shock when their property taxes are double or triple what the previous owner paid.

Calculate everything before you make a move

Just because there are unexpected costs associated with moving to Florida doesn't mean you shouldn't make the move. Every town, city and state has different costs that may offset tax breaks. The good news is that with a little research, you can figure out what they are ahead of time and determine if the Sunshine State still makes financial sense for your retirement.

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Sometimes, punching the clock for the very last time can feel more unsettling than exciting, even if your biggest fear isn't running out of money. Instead, it might be losing the daily structure, work friendships, or the purpose and identity that the workplace provided.

The good news? There are both practical and psychological signs that you're truly ready for retirement, and on your way to enjoying one of the best chapters of your life.

Here are 8 key signs you'll thrive in retirement — even if part of you is quietly panicking.

1. You're already practicing retirement

If you've already started experimenting with having spontaneous days — whether during long weekends, vacations or through phased work — and found yourself energized rather than anxious, that's an indicator you're ready to retire.

People who thrive in retirement often discover they can create their own rhythm. They replace the old 9-to-5 with new hobbies, volunteering, exercise, taking classes, or spending more time with the grandkids or other family — and they do it without feeling particularly anxious or guilty.

Rod Mitchell, Psychologist and Clinical Director at Emotions Therapy in Calgary, explains that one indicator of how prepared someone is for retirement is whether they have developed their own daily structure during unscheduled periods. "The people who tend to thrive in retirement are those who feel calm, not anxious, when they look at an empty calendar for the coming week," Mitchell said.

2. Your finances give you real breathing room

Financial security is the foundation of a happy retirement. You don't need to be wealthy, with the magic number of $1.46 million in your pocket. However, you should have a clear picture of your income sources from Social Security, retirement accounts, savings and investments, and a realistic withdrawal plan in retirement.

A good rule of thumb is that once your everyday expenses are covered with breathing room and your emergency fund is solid, you can shift your focus from survival to lifestyle. From that point, retirement calculators and annual financial reviews turn leftover money worries into actionable plans for a comfortable future and a happy retirement.

3. You've got a life beyond work

One of the strongest predictors of happiness in retirement is having a few (or many) interests and relationships outside of work. If you have friends, community groups, or passions that are not specific to your job title, you're already ahead of the game.

Elizabeth Lombardo, PhD, Concierge Coach at Elizabeth Lombardo International, LLC, says that since we are all social creatures, having strong relationships outside of work is a step toward ensuring you thrive in retirement. "If your entire social circle revolves around your job, you might worry about loneliness. Cultivating new friendships through community groups, hobbies, or volunteering can help you build a supportive network that sustains your happiness in retirement."

4. You're curious about the future

A subtle but telling sign you are anticipating what's yet to come is shifting your thinking from "I'll miss the office" to "I wonder what I'll try next."

Retirement-ready individuals tend to feel some curiosity and excitement when they think about life beyond work. They may be itching to talk about travel, learning a new skill, starting their own small business, or finally tackling that list of long-overdue projects.

"The happiest retirees are those who have planned for the transition," says Stuart Schiffman, Founder and Principal at Compound Wealth Advisors. "They take into account the time they have left, the goals they want to achieve for themselves, and the values they want to instill as a legacy for future generations."

5. You have a flexible plan for the future

Thriving in retirement doesn't require a minute-by-minute schedule, but having some structure helps. For example, Monday for exercise and volunteering, Tuesday for grandkids and yard work. Allowing yourself the flexibility to change your plans is what separates those who flourish from those who feel at loose ends.

Financially, this also means having a flexible spending plan that takes into account healthcare expenses, travel costs and money leftover for fun, without derailing your nest egg.

6. You're comfortable with a slower pace

Work often defines who we are. A key psychological sign of a happy retiree is when you start separating your self-worth from your job title. If you can imagine introducing yourself without mentioning what you used to do for a living — and feel okay about it — you're making progress.

"This perspective allows retirement to represent a period of potential personal development rather than an end to previous experiences," said Dr. Lauren Grawert, MD, Clinical Advisor at The Garden Recovery and Wellness.

7. Your physical and mental health are priorities

Preparing to succeed in retirement means taking care of your physical and mental health with regular checkups, physical activity, social connections and good sleep.

On the financial side, long-term estate planning and health care cost estimates are factors you need to consider when laying out your retirement budget. Long-term care is expensive, and preparing ahead of time can make all the difference between a stressful and stress-free retirement.

8. You're more excited than scared about the future

It's normal to have mixed emotions about retirement. But if feelings of possibility and relief are starting to outweigh the fear of losing the structure of the workplace, you're ready to kick the day job goodbye. Retirees who thrive treat the transition like any big life change, with preparation, patience and a willingness to adjust.

Make sure your money is working for you

A big part of thriving in retirement is knowing your money is working for you. Here are a few practical tips that can help reduce any anxiety you might be feeling:

• You've stress-tested your estate and retirement plans against market downturns, inflation and a longer lifespan.
• You maintain a diversified portfolio with some conservative investments as you age.
• You've considered part-time work, consulting, or a small "retirement business" as a way to phase into retirement.
• Healthcare and long-term care costs, including Medicare supplements, HSAs, or insurance, are factored in.

Give it a try first

Lombardo offers these final words of advice: "I often encourage people to try out retirement by taking an extended vacation where they are completely cut off from work. This is not feasible for everyone, but for those who are considering retiring and not sure that they can handle it, an extended period away from work allows them to start to develop some of the important components of a healthy retirement."

Do you recognize any of these signs in yourself? If so, bravo. You're not just surviving retirement, you're well on your way to making it your best chapter yet.

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For older adults who need supervised care throughout the day, an adult day center can offer some much-needed support. These nonresidential facilities provide services such as medical assistance, social interaction and organized activities for participants, who typically have some physical or cognitive impairment. And their adult child, spouse or other caregiver can use the time to work or take a break from their caregiving responsibilities.

Generally, there are three types of adult day centers. Social day centers primarily offer opportunities for attendees to interact with one another and participate in group activities. A medical day center also provides health-focused services, such as physical or occupational therapy. Specialized centers include services such as memory care or therapeutic exercises for those with certain health conditions, such as dementia or Parkinson's disease.

To find local day centers, Tia Sauceda, executive director of the National Adult Day Services Association, suggests using NADSA's tool or this AARP-sponsored directory (click on "Community Services"). Or ask your loved one's doctor for recommendations. Once you've narrowed down a list of centers to consider, contact your state's department of aging to verify that they are licensed, and visit them in person, says William Zagorski, president of American Senior Care Centers, in Nashville. Day centers typically require a doctor's letter detailing the attendee's health condition.

Financial assistance and tax breaks

According to a 2025 study from CareScout, a site families can use to search for care providers, adult day centers charge a median daily rate of $95. Some centers have additional fees for certain services, such as a certified nursing assistant providing showers, says Sauceda.

While original Medicare generally doesn't pay for care at an adult day center, some Medicare Advantage (Part C) private insurance plans cover the expense. Medicaid, the government-provided health insurance for low-income Americans, may also cover day center care.

A specialized Medicare/Medicaid program that provides coverage for adult day center services is the Program of All-Inclusive Care for the Elderly (PACE). It aims to help older adults who need a nursing home level of care to continue living in their homes and is offered in 33 states (see the list here) and Washington, D.C.

A couple of other possible avenues for financial assistance: If your loved one has a long-term-care insurance policy, see whether care from an adult day center is included. Military veterans enrolled in the Veterans Affairs Medical Benefits Package who need clinical care are eligible for coverage at an adult day center.

Don't overlook tax breaks you may qualify for as a caregiver. If your loved one is unable to care for himself or herself and lives with you at least six months of the year, and you pay for them to attend a day center while you work or seek employment, you may be able to claim the child and dependent care tax credit.

If your employer offers a dependent care flexible savings account, through which you can set aside pretax dollars to pay for a dependent's care while you work, you may use those funds for day center care. (Note that you can't use the same expenses your FSA reimburses to claim the child and dependent care tax credit.)

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Wealth Wise is Kiplinger's advice column on navigating retirement-related dilemmas. Got a question? See below for how to send it to us.

Dear Wealth Wise: At 49, I have more retirement savings than I ever imagined. My IRA is worth almost $2 million, and I inherited my house, so there’s no mortgage. It’s worth almost $1 million, so the taxes on it are high. I also have $300K in investments outside of my IRA and a six-month emergency fund.

I’m burned out and want to take a sabbatical, which my company will not support. I would have to quit and start over. I want to spend the time traveling and seeing old friends. I have several living in Europe with whom I can stay .

I'm single, no kids, no pets. I'd use the $300K investment account and emergency fund to pay my bills while not working. I want to take a break of six months to a year. My usual expenses are about $100K a year and I make $200K, so I save a lot of my income. I'll be spending more while out of work to pay for travel and health insurance.

I’m not really worried about affording the sabbatical so much as what happens next. If I can’t get back to a big salary, do I have enough in my IRA on which to retire? Is there anything I’m missing in my sabbatical plan? — Wealthy But Weary

Dear Wealthy But Weary: When you've been working hard for more than two decades, there might come a point when you feel you need a break — and not just a long vacation, but a months-long period to recharge, pursue hobbies, and take time for yourself.

Here, we have a 49-year-old reader in great financial shape, set on taking a sabbatical, even knowing it will mean starting a job search from scratch when returning. Let's see what our experts have to say about this plan, and what tweaks they might recommend.

You can probably swing the time off, but make sure to fund it the right way

Many people in their late 40s are scrambling to catch up on retirement savings. With an IRA worth close to $2 million, our reader is in the opposite boat. Between that and their $300,000 portfolio, they're in a strong position to take an extended break, says Rob Burnette, investment adviser representative and professional tax preparer at Outlook Financial Center.

"For the short term, you certainly have sufficient funds for a one-year sabbatical. Using your non-IRA investment account for living expenses is very tax-efficient and doesn’t run afoul of early distribution penalties on your IRA," he says.

However, Burnette cautions, "I would try to keep your emergency fund intact for its purpose — emergencies."

Trevor Houston, CEO at ClearPath Wealth Strategies, agrees.

"My advice is to set up a separate savings account dedicated to covering expenses during an intentional career break. Don't start raiding retirement accounts or building debt. This fund should be separate from the emergency fund. A planned career break is not an emergency," he says.

Houston also emphasizes the importance of planning for extra costs during a workforce break.

"The biggest mistake I see people make when planning a career sabbatical is assuming they only need to replace their regular paycheck," he says. "Unfortunately, things like health insurance, taxes, inflation … can end up totaling more than people may expect."

Before moving forward with a sabbatical, Houston recommends mapping out the costs, including surprise expenses that may arise, like home repairs. If your budget can support unplanned costs, you should be in good shape.

Speaking of home repairs, Mike Dunlop, CFP and co-founder at Ignite Financial, says that as a homeowner, you have an opportunity to help fund your sabbatical without raiding your investment account too heavily.

"I'd also at least have them look at that $1 million paid-off house sitting empty with a big property tax bill while they're in Europe. Renting it out might cover a good chunk of the trip," he says.

The only catch? Rental income will boost your modified adjusted gross income (MAGI), which could bump up your premiums for marketplace healthcare.

Your sabbatical year could be a good tax-planning opportunity

Giving up your paycheck for a year might be daunting, but it could serve as an opportunity to make a smart long-term tax-planning decision.

"While you have a large IRA, that is also a tax bomb that will go off when you do draw funds from it in retirement. For full tax diversity, you need to add a Roth IRA to your mix so that you have everything covered," Burnette explains.

"During the year on sabbatical," he continues, "you could look at doing some Roth conversions on your IRA while you aren’t drawing a large salary. The Roth conversion would certainly improve the status of making your $2 million in retirement assets go further when you finally retire."

Dunlop agrees that a Roth conversion could be a smart move during a planned sabbatical. But he also cautions that a conversion could lead to higher health insurance costs.

"I'd want them watching the health insurance piece, because ACA coverage can be cheap when income's low," he says. "But a Roth conversion bumps that income up and can shrink the subsidy, so those two levers work against each other."

Make sure you have a re-entry strategy

If you take a sabbatical at 49 and return to the workforce at 50, you might not be nearly ready to retire. Houston says it's important to plan for a re-entry that could take more time than anticipated.

"What happens if it takes longer than you expect, and your sabbatical savings are gone? What's happening in your industry? How might you need to adjust your career plans?" Houston says.

Dunlop says that at your age, there's some risk of age discrimination.

"The over-50 job market is real, and I won't pretend otherwise," he says.

However, Dunlop insists you have one thing going for you: You don't necessarily need to replace your $200,000 salary if you only spend $100,000 a year and have a robust IRA to fall back on. Trying to find a job is less scary when you can accept a lower number.

"The next job really only has to cover what they actually spend," Dunlop insists. "When you don't need the paycheck, you can usually interview better and hold out for something you actually want."

Enjoy your time off

There you have it. Our three experts agree that you're in a great position to take a much-deserved sabbatical. Even if you get a lower-paying job upon your return, you've built up a large enough IRA balance that you can let that money sit and grow until retirement age and still have more than enough.

If you want to approach that career break with even more confidence, it could pay to consult a professional.

"This would be a great conversation to have with a financial planner will look at all aspects of your financial situation," Burnette says.

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our writers and experts, in this advice column, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial adviser regarding any questions you may have in relation to the matters discussed in this article.

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Every retirement plan is built around the same fear: Outliving your money. The industry has developed sophisticated tools to address it.

• Monte Carlo simulations model the probability that a portfolio will survive 30 years of withdrawals
• Safe withdrawal rates are debated to the decimal point
• Longevity risk is taken seriously

The research has identified a different risk, one that is statistically more common, demonstrably more devastating and absent from virtually every financial plan in circulation.

The risk is outliving your mind.

A 2025 systematic review in Health Psychology Review confirmed what longitudinal research has been building toward for a decade: Retirement is associated with measurable cognitive decline, not only because people age but because structured cognitive demand disappears.

Researchers gave the mechanism a name: The mental retirement hypothesis. When the brain is no longer required to perform at the level a career demanded, it follows the body's example and withdraws from challenge. The decline is not inevitable. It is, however, predictable — and far more preventable.

The professor

Margaret spent 41 years as a professor of developmental psychology at a major research university. She published extensively, advised doctoral students, taught graduate seminars and worked at the edge of her discipline for three decades. She retired at 68 with a comfortable pension and her health intact. Within 16 months, she quietly realized that something she had always taken for granted was beginning to slip.

She knew the research. She had assigned papers on neuroplasticity and cognitive aging to her students. She understood, at a scholarly level, exactly what was happening. She simply had not planned for it.

What work does for your brain

The workplace offers something most people never consciously notice until it is gone: A daily cognitive stimulus framework they did not have to design.

• Novel problems arrived uninvited
• Deadlines imposed urgency
• Colleagues challenged assumptions
• Students asked questions with no clean answers
• The environment kept the brain engaged

Margaret's career was among the most cognitively demanding. Her days required reading new research, evaluating evidence, constructing arguments, defending conclusions under peer scrutiny and translating complex ideas for audiences that expected precision. None of it was easy. All of it was, neurologically, exactly what the brain requires to sustain function.

This is where the research presents an inconvenient finding for high achievers: The steeper the cognitive demands of the career, the steeper the potential decline when those demands end. Retirees from high-complexity occupations, such as physicians, executives, lawyers and academics, face the greatest gap between career-level cognitive engagement and the engagement that retirement, by default, provides.

The person who built the most sophisticated mind is, in the absence of deliberate design, at the greatest risk of watching it diminish.

Margaret's retirement did not end her paycheck. It removed the daily stimulus her brain had organized itself around for four decades. The seminars ended. The doctoral students graduated. The editorial reviews stopped arriving. The conferences, the department meetings, the weekly urgency of a discipline that never stopped moving — all of it faded within a single academic year.

What replaced it was quiet and comfortable. And, by the standard the research now applies, cognitively insufficient.

The antidote isn't what you think

When people learn that cognitive engagement protects the aging brain, the response is predictable: Crossword puzzles, brain-training apps and sudoku. These feel like the right answer. They are not wrong, exactly. They are simply not enough.

The research draws a distinction most people miss. Practicing a skill you already possess is maintenance. The brain grows through novelty, not repetition. A crossword puzzle that takes 45 minutes is not the same as a problem with no known solution that requires you to build new mental frameworks to approach it. The first sustains what is already there. The second creates something new.

Researchers at Binghamton University have identified social engagement as, in their words, "simply the single most powerful factor for cognitive performance in old age," ranking it above brain games, supplements, and even formal education. The engagement they describe is social complexity: Relationships that require reading another person, managing disagreement, sustaining a connection through difficulty and being genuinely accountable to another person's expectations.

The research consistently identifies three protective conditions:

• Novel learning, meaning acquiring skills and knowledge you do not already possess
• Social engagement with real complexity and mutual accountability
• Purposeful challenge, meaning goals that require sustained effort and carry real consequences

Margaret's daily crossword does not meet the level of challenge her brain requires. A structured role mentoring junior faculty two mornings a week meets all three. She is learning how her discipline has evolved since she last taught it. She is accountable to people who need her. The outcomes matter. The cognitive demand is functional, not decorative.

The distinction is not about difficulty. It is about demand and whether that demand is connected to something with genuine stakes.

Designing the cognitive portfolio

The financial planning vocabulary that dominates retirement conversations offers, perhaps unintentionally, a useful frame.

A well-managed financial portfolio is diversified across asset classes, actively monitored and adjusted as conditions change. Left unmanaged, it is exposed to risks the owner has not accounted for.

The same logic applies to what might be called the cognitive portfolio: The collection of activities, relationships and challenges that keep the brain operating at a level commensurate with its capacity.

Most retirees do not deliberately manage their cognitive portfolio. They leave it to chance — and chance, without intention, follows the path of least resistance.

Three non-negotiables belong in a well-designed cognitive portfolio:

Novelty. Learning something genuinely new, not merely practicing what is already mastered. A retired professor of developmental psychology who is learning a new language, building furniture or navigating a community board where she holds no authority qualifies. A retired professor reviewing papers in her own specialty, while valuable, does not yield the same neurological return.

Social complexity. Relationships with real stakes, mutual accountability and the productive friction that keeps the mind alert.

Purposeful challenges. Goals that require sustained cognitive effort and carry consequences the retiree genuinely cares about.

For Margaret, this meant three commitments in her second year of retirement:

She joined a community mediation program, a field where her expertise did not transfer and her credentials carried no weight

She accepted an invitation to co-teach a public seminar with a colleague 30 years her junior, a role that required her to learn as much as she taught

And she began meeting weekly with two graduate students whose dissertation committees she had agreed to serve on as an external reader

None of it re-created her career. All of it replicated the conditions her career had provided: Novel inputs, social accountability and a goal that demanded her best thinking.

Intellectual stimulation is one of the five pillars of a fulfilling retirement. Among the five, it is the one most often treated as supplementary. Research on cognitive decline suggests it is anything but. It is load-bearing.

A different kind of risk management

Margaret knew the theory. She had spent four decades teaching it. The gap in her retirement plan was not ignorance; it was application. She understood, in the abstract, that the brain requires challenge to sustain function. She had simply not built that requirement into the concrete architecture of her daily life.

That gap is not unique to academics. It is the structural condition of traditional retirement applied to a brain that was never designed to stop working.

The paradox the research holds without resolving, the very qualities that made a career exceptional, such as the appetite for intellectual challenge, the drive toward mastery and the need for work that matters, are the same qualities that make retirement cognitively risky when they are not deliberately redirected. The high achiever's greatest professional asset becomes, without intentional design, the high achiever's greatest retirement vulnerability.

Financial planning has developed precise tools for managing money over a 30-year retirement. It has not yet developed equivalent tools for managing the mind over the same span. Both are depletable. Both respond to how they are managed. Both require a strategy.

Every retirement plan should answer two questions. The first is familiar: Will the money last?

The second has been absent from the planning conversation for too long.

Will the mind?

To learn more about designing a fulfilling retirement, pick up my new book, Your Encore Years: The Psychology of Retirement.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The allure of retiring to Florida can be strong. Palm trees, sandy beaches, warm weather and zero income tax drive retirees in droves.

But for some, Florida isn't what they expected. Sure, they save money on income taxes, but the hefty homeowners' association fees and skyrocketing insurance premiums more than cancel that out. That doesn't include the hurricanes, persistent humidity, heavy traffic and overcrowding.

These retirees want what Florida promised, but on a more manageable scale. They can get that from what is known as "half-back" states, which offer tax-friendly policies, mild weather and a lower cost of living.

For Northeasterners, they sit perfectly between Florida and their old hometowns, keeping them within an easy day's drive of the grandkids. They might not check off every box that Florida offers, but what they lack, they make up for in their own unique charm and appeal.

If you're ready to say goodbye to Florida's heat and high HOA fees, here are four half-back states that might be right for you.

Why Georgia is a top pick for ex-Florida retirees

Georgia might tax your income, but it offers other advantages that make it appealing to disillusioned Florida residents, including no tax on Social Security benefits, no estate or inheritance tax and low property taxes.

There's also the Georgia homestead exemption, which lowers property taxes for homeowners through the reduction of some county and school taxes. It is offered at a set amount by the state of Georgia, but some counties offer higher amounts. People age 65 and older might be granted an additional exemption.

Beyond taxes, Georgia offers warm weather without the extremes of Florida. Winters are mild, with temperatures dropping to around 60 degrees. Summers are hot, with temperatures reaching into the 90s, but not as humid as Florida.

Homes are more affordable in the Peach State. A two-bedroom house costs about $335,358, while a one-bedroom rental is around $1,440 per month. That compares with $378,126 and $1,693, respectively, in Florida.

Georgia also gives retirees something that Florida can't: geographic diversity. Retirees can live near the historic streets of Savannah or in the peaceful Blue Ridge Mountains. In Georgia, you get it all: mountains, the coast and small, charming towns dotted all over the state.

North Carolina: Milder seasons without the humidity

You won't get the year-round summers that you do in Florida, but you also don't have to worry about oppressive humidity in the Tar Heel state. North Carolina offers retirees a four-season climate, but milder. Temperatures hover around 50 degrees in the winter and 90 degrees in the summer.

While North Carolina taxes your income, it exempts Social Security benefits and doesn't have an estate or inheritance tax. You can purchase a two-bedroom home for around $340,430 in North Carolina, which is cheaper than in Florida. Prefer to rent? A one-bedroom apartment is about $1,362 per month in the state.

Just as in Georgia, you get the best of both worlds in North Carolina — the Blue Ridge Mountains, which offer stunning views and great hiking trails, and the Atlantic coast. There's also city life, thanks to Charlotte, home of the Carolina Panthers professional football team and the Charlotte Hornets, its professional basketball team. It's even closer than Florida if you're visiting friends and family in the Northeast.

South Carolina: A taste of Florida closer to home

South Carolina gives you a taste of Florida with miles of sandy beaches, southern charm, plus a slice of the Blue Ridge Mountains. Home to historic coastal cities and pristine golf courses, South Carolina is a popular destination for half-back retirees because of the mild weather and low cost of living. Temperatures during the winter are around 60 degrees; In the summer, they hover around 90 degrees.

South Carolina taxes your income, but you don't pay taxes on your Social Security. You can also deduct up to $15,000 of your individual income or $30,000 for couples filing jointly. Your heirs won't have to worry about paying an inheritance tax. The average cost of a two-bedroom home is $309,323, while a one-bedroom apartment goes for $1,412 per month.

Tennessee: No income tax and mountain living beyond the coast

You won't find sandy beaches in Tennessee, but you will find a mix of rolling hills, mountain peaks and the birthplace of country music.

Home to Dolly Parton's theme park, Dollywood, Tennessee offers retirees a mild climate, a low cost of living and quick access to friends and family in the Northeast. In Tennessee, retirees can choose to live in the mountains of Gatlinburg or Pigeon Forge, or at the center of world-class music culture in the rolling hills of Nashville.

As with Florida, Tennessee doesn't have a state income tax, nor does it tax Social Security or withdrawals from retirement accounts, such as 401(k)s and IRAs. There is no inheritance tax, and property taxes are low. You can get a two-bedroom home for an average of $338,769. Monthly rent for a one-bedroom apartment is $1,365.

Is a half-back move right for your retirement?

Florida might have been your lifelong dream for retirement, but don't beat yourself up if it didn't work out. You aren't alone. The good news is there are plenty of half-back states you can call home. Some offer you the sandy beaches of Florida, warm summer months and a vibrant coastal lifestyle. Others offer geographic diversity, a lower cost of living and proximity to family and friends.

But before you move to one of these half-back states, do your homework, crunch the numbers and test drive before making it permanent.

Methodology: To select the best half-back states for retirees, we looked at the proximity to Florida, the average price of a two-bedroom home based on Zillow, and the average rental price for a one-bedroom apartment, according to Apartments.com. We also looked at the average temperatures in the winter and summer months, activities for retirees and the tax treatment in the state.

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For some people, the appeal of retiring abroad lies in the ability to live well for less than it would cost in the U.S. Others seek more affordable healthcare or a less divisive political climate. Still others, such as Karen Fifer Ferry, 68, and her husband, John, 74, are lured by love — not for each other (though the couple has that in abundance), but rather for the place they now call home.

For the Ferrys, that means Green Turtle Cay, a tiny island in the Bahamas boasting pristine beaches, crystal blue waters, picturesque clapboard houses and lush coral gardens.

The couple started vacationing there when their three children, now in their mid-thirties, were small. They kept going back, increasingly enamored of the island’s physical beauty and its warm, welcoming community of around 500 people — a place where, Cheers-style, everybody knows your name.

The couple bought a cottage there in 2012, gave up their U.S. home in Providence in 2014 and worked largely remotely. They decided to retire in the Bahamas permanently after Karen left her job as a consultant to healthcare companies in 2018 and John, a pediatrician and executive recruiter for the healthcare industry, followed suit a year later.

Since they already owned property in the country, the path to becoming permanent residents was straightforward, requiring only additional references to attest to their character, documentation of sufficient financial assets to show they wouldn’t become a burden to the government, and an application fee.

Since then, the Ferrys’ overseas retirement has had plenty of ups and a few downs. In 2019, Hurricane Dorian, a Category 5 storm, destroyed the couple’s island home; during the two years it took to rebuild, the Ferrys lived in a 17-foot trailer on their property.

Now they have a 1,400-square-foot cottage more than double the size of their old one on the narrow tip of the island, surrounded by water on three sides. Friends and family are constant visitors, and their days are full with dips in the ocean, long walks on the beach, volunteer work and plenty of porch time admiring the view. Their biggest expense is regular travel back to the States to visit their kids and four grandchildren.

It is an idyllic life, the couple say. "We were never really choosing to leave the United States," Karen says. "We just fell in love with this place."

A growing trend of retiring abroad

Like the Ferrys, more and more retirees are pursuing their version of a dream retirement in places that aren’t in the U.S. Although there are no hard data on their numbers, the trend is clear in the growing ranks of retired workers receiving Social Security benefits overseas: up 22% over the past 10 years.

Meanwhile, according to a 2025 Harris poll, more than one-third of Gen Xers and one-fourth of baby boomers have considered moving out of the U.S. Their top motivation was a lower cost of living abroad, followed by political dissatisfaction and a desire for a higher quality of life.

"It’s not that people who are considering retiring abroad don’t have the money to retire well in the United States, but more that they like the idea of being able to live better, to have an adventure and see their nest egg go further," says Jennifer Stevens, executive editor of International Living, which guides people to the best places to live and retire overseas.

Also fueling the trend: Many countries have made the route to retiring abroad easier in recent years, shifting from processes that required a large initial investment from foreigners looking to establish residency to pathways in which you can demonstrate that you have a certain minimum amount of guaranteed passive income — a stipulation often satisfied, depending on the country, by Social Security benefits alone.

Still, deciding whether to actually forge ahead and, if so, picking the right place and establishing a happy life there can be daunting.

Moving far from family and friends may feel lonely, especially if it’s to a place where you don’t speak the language. You may be hit with unanticipated costs or other snafus, and taxes and estate planning can be complicated.

For those who can make it work, though, retiring abroad really can be a dream come true, offering cultural adventure and a higher standard of living at a lower cost. Intrigued? Here’s what you need to know and, if you go, how to make the move a success.

Start with a wish list

Before Cynthia and Edd Staton made the leap to retire in a foreign country, they wrote down everything they hoped their ideal location would offer.

The year was 2010, and the couple was a casualty of the Great Recession. Both had been high earners living and working in Las Vegas — Edd in automotive services, Cynthia in luxury real estate. —and when those industries went bust, they lost their jobs and couldn’t find other work that paid enough to cover their bills. They were burning through savings and needed a big lifestyle change.

Retiring abroad felt like a viable Plan B. "We wanted to feel like we were moving toward something instead of moving away from something," says Cynthia, 73. "For the first time in our lives, we sat down and really talked about what we wanted going forward."

The place they chose, the midsize city of Cuenca in Ecuador, checked all the boxes on their wish list. The cost of living was low, and the climate was mild.

It was close enough to the eastern coast of the U.S. that they could easily travel back to see their adult children, and it was in the same time zone, which made calling and video chatting easy. The healthcare system was decent, and the amenities were modern.

Sixteen years later, the Statons are still in Cuenca, living in a penthouse apartment with a large terrace overlooking a river. They eat out when they want, enjoy gym and yoga memberships and other creature comforts, and are planning a monthlong vacation in Italy this fall. And it’s all affordable on their monthly Social Security benefits alone.

"Most months, we have enough money left to put up to 20% in savings," says Edd, 77, who along with Cynthia now offers advice to other people interested in retiring abroad via a blog, articles, books and courses on their website.

Figuring out where in the world you might like to retire starts with the kind of self-reflection the Statons engaged in, experts say. "Ask yourself, if money were no object and you could define the retirement you want, what would your days look like, what are your non-negotiables, and what would you love to have but may not be essential?" Stevens says.

Besides obvious considerations such as your budget and healthcare needs, think about whether you’d feel most comfortable someplace with a large expat community, whether you’re open to learning another language, and what you want your surroundings to be like.

Maybe you prefer an area rich with history or to live near, say, museums and concert venues, great markets if you love to cook, or plenty of golf courses if you like to play.

Then, armed with answers, consult some lists of best places to retire overseas, such as those published by International Living, Global Citizen Solutions, Live and Invest Overseas and other organizations. You can use ChatGPT, Gemini or other artificial intelligence tools to search, too, plugging in your key factors to see what pops up.

The goal is to create a personalized shortlist of countries that meet your criteria and are worthy of further investigation. Says Stevens, "Dream big first, and then let the technicalities eliminate some of the places you might be thinking about."

Go for a trial run

Once you’ve narrowed the field, take a scouting trip — or, better yet, a few — to check out places that interest you. Try living like a local while you’re there. Rent an Airbnb instead of staying at a hotel. Shop at the grocery store and cook, rather than always eating at restaurants. Hang out with expats at the local pub to hear what they say about the place.

"People often make the mistake of thinking they want to retire somewhere they love to go on vacation," says Edd Staton. "The problem is that you go on vacation to get away from your life, not for it to become your life."

Be sure to visit in the off-season. "If you go to Spain or Italy in July, the weather is great, there are festivals and great food, and everyone’s having fun," says Alex Ingrim, CEO of Liberty Atlantic Advisors, which specializes in financial advice for Americans living abroad.

"Seeing what a place is like in January, when three-quarters of the restaurants are shut down, is the real test. You need to make sure it’s the right place for you year-round."

What you want to learn from this exercise: "You can get to a place and your heart just says no, even though logically, on paper, it should be the perfect place for you," says Stevens. "Or you visit a place that you thought you should eliminate, but you go just in case and think, Well, this is fabulous. This is the one."

Understand the rules of entry

Many foreign governments make it surprisingly easy and affordable for Americans to retire in their country, shifting in recent years from requiring large lump-sum investments to establish residency to simply asking for documentation that you have a certain minimum amount of guaranteed passive income from sources such as Social Security and pensions.

In many places, those minimums are quite modest, often easily covered by Social Security benefits alone. Global Citizen Solutions, an advisory firm for people planning to move overseas, found that 61% of the 44 countries it analyzed in Europe, the Americas, Africa and Asia require a minimum monthly income of 2,000 euros or less (around $2,325, at recent exchange rates), including Portugal, Panama and France.

Typically the visas are good for a year, then must be renewed annually. But nearly half offer longer residencies (Portugal’s visa is good for two years, as is Uruguay’s), and a few countries, including Panama, offer permanent residency from the outset.

Other requirements typically include proof that you have health insurance and a place to stay once you enter the country.

Once you start the process, it commonly takes three to four months for a visa to be approved, but you should give yourself six months of leeway, said Adalberto Pucca, head of global mobility solutions at Global Citizen Solutions.

"It’s important to know the rules about obtaining residency, but the ease of the visa process shouldn’t be a high-ranking factor in your decision about where to move," Pucca says. "Go where you’ll be happiest."

Expect to live larger for less

No matter where you end up in the world, your living costs will likely be lower than what you’d pay to lead a similar lifestyle in the U.S., experts say. That’s typically true, they say, even in highly developed countries and with today’s weak dollar against the euro and other currencies.

How much lower, however, will differ dramatically depending on which country you choose and what town, city or region you settle in.

Retiring to Central or Latin America, for instance, will be substantially less expensive than retiring in Europe; within Europe, Greece will be easier on your budget than France, and within France, living in the countryside will be much cheaper than retiring in Paris.

You can compare living costs in various cities and countries at the website Numbeo. International Living also publishes typical budgets for retirees in the 22 countries it ranks. Your costs, though, may be very different from the "typical" budgets seen on best-places lists, depending on your preferred lifestyle.

"Maybe you will rent a house instead of an apartment. Maybe you like to eat out more often or go to higher-end restaurants. Maybe you prefer to take Ubers rather than use public transportation," says Pucca.

"It’s important to personalize your cost-of-living estimates, based on your own research and the prices you pay when you visit."

Line up healthcare in advance

Nearly four out of 10 Americans considering a move abroad cite the availability of better, more affordable healthcare as a top reason, the Harris poll found. The good news, experts say, is that healthcare is indeed less expensive in most other places in the world, though by how much differs sharply from country to country, as well as within countries among different cities, towns and regions — just as in the U.S.

The same is true for the quality of care. You’ll generally have access to first-rate treatment in most countries in Europe, with France, Portugal and Spain topping the list for best healthcare based on a combination of quality, access and affordability in International Living’s rankings. Panama also wins high marks, as does Costa Rica.

Though most countries have some form of government-subsidized health care, it can take time — typically from three months to two years — for newcomers to qualify.

So you’ll need private coverage from a national or international insurer to bridge the gap. International carriers include Cigna Global, Blue Cross Blue Shield Global Solutions and International Medical Group.

Even after qualifying for the public health system, many expat retirees retain private coverage for access to higher-quality medical facilities and shorter wait times.

One strategy to keep costs down is to opt for catastrophic coverage only and pay out of pocket for routine care, since the costs are typically low in many countries, says Hunter Schultz, a healthcare consultant for Expatsi, a company that helps Americans relocate abroad, and author of Expat Health Guide.

He notes, for example, that in Panama, where he lives as a U.S. expat, people pay about $30 for a primary care visit, and he recently paid $110 for an ultrasound of his shoulder — before the 20% senior discount he gets on medical expenses.

Schultz likens it to how Americans use auto insurance. "You wouldn’t put in a claim with your insurer for an oil change or new spark plugs. It’s just the big expenses, and that’s the way people often use health insurance in other countries," he says.

One additional expense you shouldn’t forgo: retaining Medicare coverage.

While your benefits won’t cover care in the country you move to, you’ll need them to help pay for any treatment you receive when you’re back in the U.S. for visits or if you need to seek treatment from a specialist here.

You’ll also need Medicare if you eventually come back to the States to live, as many retired expats end up doing. While you can re-enroll in Medicare after a lapse in coverage, you’ll be hit with a stiff lifetime penalty for doing so: 10% of the standard Part B premium for every 12 months when you could have had Part B but didn’t.

Manage taxes with care

International wealth managers routinely use two words to describe the tax situation that Americans who retire abroad face: It’s complicated.

That’s true no matter where in the world you choose to retire. The reason: The U.S. is one of only two countries in the world (Eritrea, in Africa, is the other) that tax people based on citizenship, not residency. "Uncle Sam is your most loyal travel companion," says Peter Sengelmann, director of Creative Planning International, an international wealth management firm. "He will follow you wherever you go."

In practice, that means you have to file tax returns and report income and follow the tax rules in both the U.S. and your place of residence abroad, although you won’t necessarily owe taxes in both countries.

The U.S. has treaties with more than 60 countries to prevent the same income from being taxed twice — or to at least lessen the sting.

Critically, the rules about what income is taxed and at what rate differ from country to country, with some places more friendly to retirees than others. Most countries in Europe, for instance, tax all of your income no matter where you earned it.

Others, including several in Latin America and Southeast Asia, only tax income earned in that country. Some, such as Costa Rica, Panama and Uruguay, typically exempt foreign pensions and annuities entirely, while others, such as Greece and some places in Italy, tax them at a low flat rate. Some countries treat distributions from Roth accounts (which are funded with post-tax money but provide tax-free withdrawals in the U.S.) as taxable income.

Some have much higher tax rates than in the U.S., and the higher rates start at lower income levels. In Italy, for instance, the top rate is 43% and kicks in at 50,000 euros (around $58,000 at recent exchange rates).

"It makes your head spin," says Sengelmann. That’s why experts urge U.S. retirees living abroad to work with a pro who is well versed in international tax law or, at a minimum, how U.S. rules work in tandem with those of the country you want to live in.

The nonprofit American Citizens Abroad has directories of international tax preparation and financial services providers; you can also tap expat networks on Facebook or other social media platforms for recommendations.

A pro can help you take steps proactively to limit negative tax consequences. For instance, if you’re moving to a country with a high tax rate, you might want to take some distributions from tax-advantaged retirement accounts before you leave so you’ll pay taxes on that income at lower U.S. rates.

Or you might avoid doing a Roth conversion if you’re thinking about moving to a country that taxes withdrawals from those accounts.

"Don’t let the tax tail wag the dog," Sengelmann says. "Go where you think you’ll be happy, and an adviser can help you figure out the rest."

Get your expat finances in order

As with taxes, managing the rest of your financial life when you retire abroad takes a lot more thought and at least a little bit more maneuvering than if you were dealing with the rules of one country only.

For instance, you’ll probably want to maintain bank accounts in the U.S. and in your country of residence to make it easier to pay for things in both places and maintain access to spending money that isn’t subject to currency fluctuations and conversion fees.

That’s especially true if you’ll be traveling back and forth to visit or access healthcare in the U.S. or if there’s a chance you might move back one day. (Hint: there’s always a chance.)

That means you’ll need to maintain a U.S. address, which you must also have to keep Medicare coverage. You can use a family member’s address or set up a virtual mailbox, which provides a physical address to receive mail.

Then the service scans the contents digitally and sends them to you or forwards packages. Providers include iPostal1 (plans start at $9.99 a month) and Virtual Post Mail ($20 a month).

If you’re collecting Social Security, you can continue to receive benefits through direct deposit at your U.S. bank or have benefits sent to your bank overseas. Either way, you’ll need to inform Social Security of your move, as well as fill out a questionnaire the agency will send to you every two years to confirm your address and status. The same U.S. tax rules apply.

The thorniest issue: estate planning. Some countries levy an inheritance tax, for instance, and exemptions are often much lower than the federal estate tax exemption in the U.S. Then, too, many countries, including most in Europe and some in Latin America and the Caribbean, follow so-called forced heirship rules governing the disposition of assets.

"You don’t necessarily get to choose who inherits what; it’s dictated by law and cannot be overwritten by a will," says Ingrim at Liberty Atlantic. "There are strategies you can use to bypass forced heirship laws, but it takes advance planning."

Even jointly held assets may be vulnerable to different rules of succession, and often the assets won’t automatically pass to a surviving spouse but rather will be tied up for a while — years, in some cases — as an estate goes through probate.

For that reason, Ingrim recommends that couples living abroad split some assets to hold in individual accounts so each spouse is assured access to funds as needed.

Find — and keep — your people

A study published last year in the journal Psychology and Aging found that people who retire abroad risk feeling lonelier than older retirees who stay in their native country.

Based on a survey of about 5,000 Dutch people aged 66 to 90 living in 40 countries, the researchers found that the expats reported higher levels of social isolation and, among those who lost touch with family and friends back home, greater emotional loneliness as well.

After 16 years living in Ecuador and seeing many expat retirees come and go, it’s a phenomenon the Statons are familiar with. "It can be hard to feel like you’re an outsider and always will be," says Edd. "Some people get tired of feeling they don’t fit in."

One workaround for the social isolation that many expat retirees experience: Move with or near people you know, so you have a small established community from the outset. And, experts recommend, aim to live like a local, not a tourist, interacting with residents and immersing yourself in the language, customs and culture of your new home.

That’s the approach that Marion Sharp and Noel Blyler took when they moved to Loches, in France’s Loire Valley, last year.

Sharp, 67, who had worked in nonprofit fund-raising, and Blyler, 66, a former high school college counselor, had visited close friends who had a second home in the area several times over the years. Sharp and Blyler loved it and had talked about maybe buying a second home themselves or even retiring there one day.

When the friends invited the couple to share their house and all retire there together, Sharp and Blyler took the leap.

"This is a dream more than 50 years in the making," says Sharp, who has loved France since she first traveled there when she was 16.

Obtaining a visa was easy, Blyler says, requiring only that they show they had a place to live, health insurance and a minimum level of guaranteed income, which was covered by their Social Security benefits.

Harder but fun, they say, has been learning to speak conversational French. They recently purchased a place of their own near their friends, and they are deeply engaged with the history, architecture, art and beauty of their adopted home.

"I think of it as un coin de paradis, a corner of paradise," Blyler says. Sharp, who says that friends from the U.S. are frequent visitors, adds, "There’s a different attitude toward enjoying life here. Experiencing another culture is part of the adventure."

Be ready for hassles and hiccups

Adjusting to that different culture is frequently cited by experts and expats alike as the most challenging part of retiring overseas. Learning a new language and adapting to a different pace and norms can be tough, but it’s often smaller irritants that stick out to people who have made the move.

Hunter Schultz recalls his chagrin when he first moved to Panama and couldn’t find his beloved Pepperidge Farm cookies on grocery shelves.

Karen Fifer Ferry says she often brings back cooking ingredients from her visits to the U.S. because they can’t be found in Bahamian stores, and she admits the laid-back pace can be frustrating — it took twice as long to rebuild their home after Hurricane Dorian as the initial estimate.

Ingrim says American clients are often surprised to find that many European homes don’t have dishwashers and that the furniture they shipped from their 2,500-square-foot house in the U.S. doesn’t fit in the 1,000-square-foot apartment they live in now.

Stevens of International Living recommends tapping into the expat community in your new home via social media and in-person gatherings to help solve common problems. "They can make your landing so much softer," she says. "They’ve already figured out a plumber that’s good, which vet speaks English and how you pay your utility bill."

Perhaps the most helpful thing you can do, says Stevens, is adjust your own attitude.

"When you retire abroad, there are inevitably going to be difficulties. The bureaucracy will be hard to navigate, and there will be confusion, especially if you don’t speak the language," she says. "To enjoy this new life, it really does help to think of it as a grand adventure, that it will be fun to try new foods, have new experiences and learn a new culture."

It has also helped, Ferry says, to remember that the decision to retire abroad is reversible. Circumstances change and so do people.

The Statons agree. "When people ask us if we’ll live in Ecuador forever, we say we have no idea how long forever is," says Cynthia. "What’s important is not to let worry over ‘forever’ stop you from making a move that could be perfect for you right now."

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Mark Twain said, "Never put off till tomorrow what may be done day after tomorrow just as well." Coming from a long line of procrastinators, that sentiment rings true. It was also my approach to retirement. I put off the decision again and again.

Until now.

After spending much of my career writing about retirement, I finally decided it was time to start living it. I assumed I was prepared. I had spent years researching the topic, interviewing experts and helping others think through one of life's biggest transitions.

Then I turned in my retirement notice.

What I expected to feel was relief. What I felt seemed more like loss. The experience hit me much harder than I anticipated. In fact, I went through a brief period of sadness that caught me completely off guard.

Retirement looked very different in practice than it did in theory. For the first time, I realized that preparing financially and preparing emotionally for retirement are not the same.

When your identity changes

You can say labels don't matter, but the truth is they do. For most of my adult life, I've been an employee, a writer, a colleague and a contributor. Soon, my title will change to retiree.

Am I old enough? Yes. Have I saved enough? I think so. Am I ready to become the smiling older man walking on a sandy beach? I know too much about retirement marketing to be on the cover of that brochure.

What surprised me most was how much of my identity was connected to my work.

My office sits on the corner of a busy hallway. I only have to turn toward the door to see who is walking by. Throughout the day, colleagues stop in to share stories, kick around ideas, celebrate successes or talk through challenges. There have been plenty of laughs, more than a few crises averted and countless conversations I'll miss.

Retirement means stepping away from more than a job. It means stepping away from a community and a daily rhythm that has been part of my life for decades. Recognizing the stages of change can help make sense of the transition.

In his Bridges Transition Model, researcher William Bridges describes three transitions people go through during major life changes:

• It starts with an ending
• Then comes the neutral zone, the period between an old identity and a new one
• Finally, there is a new beginning, ideally bringing with it renewed energy and optimism for the next chapter

Replacing more than a paycheck

I'll miss getting a paycheck.

I've received one every other Friday for decades. Like an old friend, that ritual is comforting and easy to take for granted.

What surprised me is that a paycheck isn't just income. It's reassurance. Every other Friday, money quietly appears in my account and confirms that everything is working the way it's supposed to.

Retirement asks you to replace not only the income but some of that confidence as well. That's one reason many retirees build strategies around reliable sources of income.

Depending on individual circumstances, annuity products can help create a stream of guaranteed^* income that works alongside other retirement assets and withdrawals. A financial professional can help you develop a customized strategy.

Learning Medicare's lessons

I'll be on Medicare.

After years of relying on employer-sponsored health insurance, I found researching Medicare to be a maze of parts, enrollment periods, deadlines and rules. A qualified insurance agent helped me navigate the process and reminded me that Medicare is anything but free.

Fidelity estimates the average 65-year-old couple will spend roughly $12,850 on healthcare during their first year of retirement. And that doesn't include long-term care expenses.

The lesson is simple: Build room in your retirement budget for healthcare costs.

Building a new community

According to the Holmes-Rahe Life Stress Inventory, retirement ranks ninth — tied with marital reconciliation — among the 43 most stressful life events measured by the scale.

In my case, retirement is accompanied by a move, which is also on the list. While I'll be closer to extended family, I'll also be leaving behind a network of workplace relationships and social connections.

I'll be looking for some new friends, and the best remedy is to get busy. Volunteering and community involvement are how many retirees build new relationships. Ken Dychtwald, founder and CEO of Age Wave, recently suggested society could benefit from an Elder Corps — something like the Peace Corps for retirees.

My own plans include joining Toastmasters, participating in a book club, spending time at a health club, reconnecting with my college alumni association and enjoying my son-in-law's boat.

I should probably let him know about that last one.

The point is to actively seek connection and avoid isolation and loneliness.

I'll get Monday mornings off

For years, the iconic ticking stopwatch from 60 Minutes triggered my Sunday scaries, shifting my mindset from weekend relaxation to work responsibilities. While I look forward to no longer caring whether it's Sunday or Monday, maintaining a schedule can provide structure and purpose.

My father, who spent nearly 30 years in retirement, opened an antique shop after a successful engineering career. He didn't sell much, but he had a place to go every day and a community of regulars and friends.

Turning a passion into a purpose can provide a reason to get up each morning while you're still finding your footing.

Appreciating the gift

Advances in medicine, healthcare and technology are steadily increasing life expectancy. Longer lives are not simply adding years to the end of life — they are reshaping how people think about retirement and the opportunities it presents.

What I've come to realize is that retirement isn't a single event, it's a transition.

I've spent years focused on the financial side of leaving the workforce. What surprised me was how much emotional preparation was required as well.

From the moment people start saying congratulations to the realization that you're now on your own path, retirement becomes a new life story.

Retirement marks an important new chapter of my life. The trick is to turn fear into curiosity and anxiety into possibility.

Like most meaningful transitions, it isn't something you fully understand until you start experiencing it.

* Guarantees are backed by the claims-paying ability of the issuing insurance company.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

If you saved $2.5 million in your traditional 401(k) or IRA, you're probably wondering how much you'll need to withdraw due to required minimum distributions (RMDs) and the impact they'll have on your retirement benefits.

They're required of everyone with a traditional 401(k) and IRA once they turn 73. It's a way for the Internal Revenue Service to get paid for all the tax-free contributions you made to your retirement account during your working years.

But those RMDs can have ramifications if they're large enough. They can push you into a higher income bracket, increase your Medicare premiums or force you to pay taxes on a portion of your Social Security benefits. You also must withdraw money that you might not need.

If you take out too much, it means less money to spend later or leave to your heirs. Take out too little, and you could be on the hook for as much as 25% in penalties. If that sounds like a lot, consider that penalties were as high as 50% before the passage of Secure 2.0. A penalty drops to 10% if you correct your RMD mistake within two years.

Here's a look at what RMDs you'll owe from ages 73 to 85 if you have $2.5 million saved. (We also looked at what you'll owe in RMDs when you have $1 million and $5 million saved.)

Calculating your RMDs

When it comes to calculating your RMDs, it's a straightforward formula that most financial advisers follow.

Account Balance/Life Expectancy Factor = RMD

Your account balance is determined as of December 31 of the previous year, while your life expectancy factor is drawn from the IRS Uniform Lifetime Table (PDF), which is the go-to chart that the vast majority of retirees are required to use, regardless of their actual health status.

Keep in mind that your RMDs aren't static and will change as you age. The older you get, the lower your life expectancy factor is and the more you have to pay in RMDs.

Because the government assumes that as you age, you have less time left to spend your wealth, it forces you to withdraw a larger percentage of your remaining savings with each passing year.

Lower your RMDs with Roth conversions

One tax-smart way to lower your RMDs is with a Roth conversion. This involves moving money from a traditional pre-tax account — such as an IRA, 401(K), 403(b), or 457(b) — into a Roth IRA, paying taxes on the transition in exchange for tax-free growth. Roth IRAs have no RMDs and allow tax-free withdrawals after five years and age 59½.

The catch? You owe ordinary income tax on the converted amount, which can push you into a higher tax bracket. To avoid this, you can spread your conversions over several years, converting only enough to reach the top of your current bracket.

If you are 73 or older, do this…

• Take your annual RMD first, as the IRS does not allow you to convert RMD funds into a Roth account.
• Convert remaining traditional IRA funds up to the top of your current tax bracket to shrink the size of your future RMD obligations. You should do this annually to shrink your RMDs.
• Pay the conversion tax bill using cash from a non-retirement account to maximize the amount of money left growing tax-free inside the Roth.

If you are under 73, do this…

• Maximize your conversions now, completing them before RMDs kick in.
• Target the low-income years between your retirement date and when your RMDs start for the conversions.
• Keep in mind that starting in 2033, if you were born in 1960 or later, your RMD age will be 75, giving you even more time for Roth conversions.

RMDs don't have to be a headache

You don't have to fear RMDs, regardless of the amount you have saved. While you can't avoid them completely, you can lower the annual amount.

The first step is knowing how much you need to withdraw. Armed with that information, you can plan strategies to lower your tax bill, such as converting money to a Roth IRA.

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The allure of living in a state with no income tax in retirement can be undeniable. You won't have to worry about withdrawals or required minimum distributions pushing you into a higher tax bracket. Nor do you have to think about the state taxing some of your Social Security or pension. Plus, every dollar you save on taxes is another dollar you can spend on travel, hobbies, spoiling the grandkids, or leaving money to your heirs.

It's one of the reasons Florida, Texas and Tennessee are popular destinations for retirees. But relocating for the tax break doesn't mean you'll automatically save in retirement. Other living expenses could make it a wash, or worse, more expensive.

"If a state doesn't have income tax, it still has to pay for things," says Chelse Stevens, a certified financial planner and VP, consultant at Fidelity Investments. "Tennessee has one of the highest sales taxes (in the country). You start to see it in other ways."

And it's not just sales tax where costs may be higher in a tax-friendly state. Florida doesn't tax your income, but it has the highest HOA fees and ranks third for the most expensive homeowners insurance. Meanwhile, Texas has the seventh-highest property taxes in the country and ranks fifth for the highest average home insurance premiums. Then there are property values, the cost of living, and health care costs to be factored in. You may not have to pay income taxes, but is everything else more expensive?

It's why Stevens says don't let the "tax tail wag the dog" when choosing where to live in retirement. Instead, ask yourself these three questions first to ensure you're moving for the right reasons.

1. What is the state's total tax picture?

When clients tell JPMorgan's Chief Retirement Strategist Michael Conrath that they are considering moving to a tax-free state, the first question he asks is which taxes they are referring to.

"It can be a pitfall to focus solely on the state income tax piece," says Conrath. "A zero income-tax rate can look great on paper, but it’s not a complete retirement plan. For retirees, the all-in picture — income taxes, property taxes, sales taxes and local taxes — is what matters."

Don't forget to consider the state's estate and inheritance taxes, says Conrath, as they can change the legacy you leave behind. Before relocating, Conrath suggests working with a tax professional, financial adviser, or doing it yourself to determine what you’ll pay in total taxes where you are now versus where you’re going.

2. Do I understand the total cost of living, and can I afford it?

Taxes are only part of the decision. There are other living expenses, which is why the second question you have to ask yourself is: Do I know the total cost of living?

"A move that saves on taxes can be offset quickly by higher insurance, utility bills or health care costs, which can vary dramatically by ZIP code," says Conrath. If you move to a state to save on taxes, will you end up paying more for housing, insurance, food, travel, medical and entertainment? Even one of those expenses could cancel out the savings from not having to pay state income tax.

3. Will the move improve my quality of life?

Moving in retirement for the taxes alone is not a good reason, even if you think you'll save money. There has to be something more, says Stevens, which is why the third question you should ask yourself is: Will the move improve my life?

Even if moving to Florida in retirement saves you tens of thousands of dollars, is it worth leaving your support network behind? A successful retirement relocation means balancing the financial benefits with quality-of-life factors, including proximity to family, friends, healthcare and daily conveniences.

"Before you move, make sure you are considering all the factors, not just one," says Stevens.

Test drive before you commit

To really get a sense of what it will be like to live in a tax-free state, consider a test run, Conrath says. Try renting for a season to get a sense of the costs and other trade-offs that won't be obvious by running the numbers on a spreadsheet. A test run can also help you "pre-experience" what normal life will be like if you retire in your city of choice.

"Don't just chase the lowest tax rate," says Conrath. "The goal is to understand and improve the durability of your plan over the course of your entire retirement so that you have the confidence to enjoy the retirement you’ve earned."

Editor's note: This article is part of an ongoing series looking at three questions to ask yourself before making a major financial or lifestyle decision. The other stories in the series are: 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You, 3 Questions That Reveal If You're Actually Ready to Age in Place, 3 Questions That Determine If You're Actually Ready to Retire Early, 3 Questions to Ensure Your Retirement Nest Egg Is Inflation-Proof, 3 Questions to Ask Before Unretiring, 3 Questions That Help You Find Your Perfect Social Security Claiming Age, Go Ahead and Splurge, But Ask Yourself These 3 Questions First and Before You Give Money To Your Kids, Ask Yourself These 3 Questions.

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'Who has the time?' isn't something retirees often say. Or do they?

Many people in retirement are busier than ever, saying yes to everything from volunteering and consulting to babysitting their grandchildren, all while juggling multiple responsibilities as they search for purpose. Others overcommit out of fear of downtime. They were so busy during their working years that the thought of free time scares them.

"I definitely know retirees who were easier to get a hold of when they were working," says John J. O'Hare, wealth manager at O'Hare Wealth Management at Steward Partners. "They are now on six different boards, traveling, volunteering, fundraising. People want to find their purpose; after that, very few know what it is, so they sign up for a million things."

Having purpose in retirement is important to stave off loneliness, depression and cognitive decline. Studies have shown it can help you live longer, lower the risk of disease and keep your mind sharp.

But how much is too much purpose? Sometimes, overcommitting can cause more harm than good. Here are five sneaky ways saying yes to everything when you retire can hurt you.

1. It can derail your retirement plans

You retired for a reason, but if you overcommit and it derails your plans, why did you leave your job in the first place?

O'Hare had one client who retired to Florida but couldn't claim residency because he was consulting too much. Another was offered a year's salary to work for three months, and that offer was extended once the year was up. Eventually, the client had to turn it down, because he wanted to enjoy his retirement, says O'Hare.

If you find you can't pursue a hobby, spend time with family, or even sleep late because you are overextended, that's a sign you may want to pull it back a bit.

2. It can cause physical or emotional stress

Even if you like jumping from one commitment to the next, your body and mind may not. Physically, it can wear down your aging body. Mentally, it could lead to burnout. If you're too busy to keep up with your regular checkups, you could end up with health issues in the long run.

3. It can lead to financial strain

Finding purpose can be expensive, especially if you're not sure what it is. If you're spending more than you have in the pursuit of purpose, it could lead to financial hardship. If you're forced to withdraw money from your savings in a down market, it could trigger sequence of returns risk, in which you lock in losses early in retirement before your money has time to recover, creating a potential shortfall later on.

"Overcommitting can show up in dollars, and it can show up in time," says JR Williams, a senior director at Ally Invest. "If you're saying yes to one trip, it doesn't really impact your finances, but if it becomes a pattern and you are traveling more than you had initially anticipated, it can blow up your budget."

4. It can leave you little free time

Retirement is supposed to be your time to relax, not to have a schedule for every minute of every day. Sure, you want a routine, but you also want time to be spontaneous. Plus, Williams says you run the risk of becoming the person that everyone assumes is always available if you always are.

Occasionally helping neighbors or enjoying spending time with your grandkids is one thing; becoming a full-time babysitter or a permanent errand-runner is another.

5. It can strain relationships with family and friends

If you're spending all your time consulting or on the golf course and not enough time with family or loved ones, it may strain those relationships at a time when you should be cherishing them. Time is a commodity, especially in retirement. Experiences matter more than how much money you can make from that consulting gig or how many times you can sink that hole-in-one.

Give yourself time

It's important to keep busy in retirement, but that doesn't mean you have to say yes to everything. Finding purpose doesn't have to happen overnight. It can be a slow and steady process.

In fact, O'Hare tells his clients to wait at least six months to a year before making any major commitments. "You want to get bored playing golf, fishing, doing all those things first and then find out if you really are bored," says O'Hare.

After that, if you want to do everything under the sun, go for it!

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Collecting Social Security at age 70 is the holy grail of retirement planning. It's the milestone that financial planners and wealth advisors urge you to strive for if you want the biggest paycheck possible.

Yet, claiming Social Security at 70 isn't that popular. According to Social Security Administration data, only around 10% of recipients actually wait until that age to collect. For some, health issues get in the way of waiting. Others don't trust that the system will remain solvent. Others need the money now, or prefer to spend it while they are young enough to enjoy it.

Either way, the vast majority of Americans choose to take their benefits long before age 70. (If you are thinking about joining them, check out five reasons why you should and shouldn't take Social Security benefits at 62).

Is taking benefits at 70 a mistake? It depends. There is a strong case to be made for waiting until 70, but there are equally compelling reasons to claim earlier. With that in mind, here are five reasons to hold out until 70 and five reasons to take the money and run.

5 reasons to wait until 70 to collect Social Security

1. You'll receive the highest monthly payout possible.
Each year you delay collecting Social Security benefits after your retirement age, which for people born in 1960 and beyond is 67, you'll receive a roughly 8% increase in your payment. After age 70, that extra 8% bump goes away. But by holding out for just those three years between 67 and 70, your permanent monthly benefit increases by 24%.

2. You'll have a larger cost-of-living-adjustment (COLA).
One of the perks of Social Security is that it is adjusted for inflation each year, as a percentage, which means the bigger your monthly benefit, the higher your COLA will be. If you wait until 70 for the highest check possible, every future COLA percentage is multiplied against a much larger number than if you collected benefits earlier. A 3% inflation increase on a $3,000 monthly check is $90. A COLA of 3% on an $ 1,800-a-month check is $54. Waiting gives you more inflation protection.

3. You can replace your lowest-earning years.
Your Social Security benefits are calculated based on the 35 highest-earning years, adjusted for inflation. During the later years of a career, people tend to be in their peak earnings period. If you choose to work until 70 and are earning top dollar, you can bump out older, lower-paying years, effectively increasing your baseline benefit. That means a bigger check when you retire and begin collecting Social Security.

4. Increased survivor benefits.
Since you are waiting until 70, you'll have a bigger monthly payment, which means that if you were to pass away first, your surviving spouse can receive a bigger monthly benefit for the rest of their life.

5. Long-term longevity insurance.
Outliving your savings is a fear many retirees have. But if you work until 70, and collect a bigger Social Security check, that concern diminishes, at least a little bit. After all, you're bringing in income for longer, saving for more time and building a larger Social Security payout. The latter of which provides permanent protection against outliving your other savings and investments.

5 reasons why you should take Social Security earlier than 70

1. You have health and longevity concerns.
If you have health issues or longevity concerns and you don't think you are going to make it to 70, it doesn't make sense to wait to collect Social Security. After all, the break-even point, or the age at which the large checks from waiting catch up to the total amount of the smaller checks, is around age 80 to 82.

2. You'll have to deplete your personal savings or get into debt.
You may have had every intention of waiting until 70, but life happens and when it does, it's better to begin receiving Social Security than getting into debt or depleting your savings to get by. If you need the cash, don't create a financial hole now for a bigger payment later.

3. Unlocking spousal benefits for married couples.
A lower-earning spouse can only begin receiving spousal benefits, which can be as much as 50% of the higher earner's benefits, once the primary earner files for his or her retirement benefits. If your lower-earning spouse needs the benefits now, waiting until 70 to claim won't do them any good.

4. Fund an early retirement.
The average age of retirement in America is 62, which is the earliest you can collect Social Security. If you want to join the majority and need the cash to fund an early retirement, Social Security can be a viable option. Especially if it prevents you from tapping your investments, giving them more time to grow and compound. After all, retirement can easily last thirty years, longer if you are retiring early.

5. Passing wealth on to your heirs.
When you and your surviving spouse die, your Social Security benefits disappear. You can not leave your Social Security benefits to heirs in your will. But if you want them to reap the benefits of your hard work over the years, you can collect earlier than 70 and use that money to pay for your everyday living expenses. This allows you to leave your existing IRA, 401(k), or other investments completely untouched so they can keep growing and be passed down to your beneficiaries.

It's up to you

Deciding whether to claim Social Security at 70 is a uniquely personal choice. While waiting guarantees the biggest possible paycheck, claiming earlier can protect your health, fund your most active retirement years and safeguard your private investments for the next generation.

Take a close look at your health, your lifestyle goals, and your retirement roadmap when determining the right age for you. If you aren't sure which path to take, seek help from a financial adviser who can help you map out the perfect strategy for your situation.

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Happy Bobby Bonilla Day! For years, I've watched memes pop up across social media every July 1. Baseball fans celebrate the day as a reminder that former New York Mets player Bobby Bonilla is still collecting a paycheck decades after playing his last Major League game. It's become one of sports' favorite annual traditions, often accompanied by jokes about the contract that just won't end.

But here's the thing: Bobby Bonilla Day isn't really about baseball. It's about money.

Few of us will ever negotiate a multimillion-dollar deferred compensation deal, but the idea behind Bonilla's annual paycheck is surprisingly familiar. Whether retirement is decades away or just around the corner, the goal is the same: replacing your paycheck with income that continues after your working years end. That income may eventually come from Social Security, pensions, annuities, investments or rental properties, but building it starts long before you retire.

Why Bobby Bonilla is still getting paid

The story behind Bobby Bonilla Day dates back to 2000, when the New York Mets wanted to move on from veteran outfielder Bobby Bonilla while he was still owed millions under his contract. Rather than paying the remaining money in a lump sum, the two sides agreed to a deferred compensation arrangement.

Under the agreement, Bonilla postponed receiving the money he was owed in exchange for annual payments that began in 2011 and continue every July 1 through 2035. Because the payments include interest, the total amount Bonilla will ultimately receive is significantly more than the original salary he deferred.

Why would the Mets agree to that? At the time, the team believed it could earn higher returns by investing the money instead of paying Bonilla immediately. Those expectations were tied in part to investments associated with financier Bernard Madoff, whose massive Ponzi scheme later collapsed. In hindsight, the strategy proved far more expensive than simply paying Bonilla what he was owed upfront.

Today, the annual payment has become known as "Bobby Bonilla Day." Now 63, Bonilla is older than the age at which Americans first become eligible to claim Social Security retirement benefits, making his annual July 1 paycheck feel even more like a retirement income stream.

While it's often treated as a punchline, the agreement is an example of a basic financial principle: money can be structured to provide income over time instead of all at once. That's a concept that extends well beyond professional sports and into many retirement plans.

Retirement is about replacing your paycheck

For most people, retirement doesn't come with a contract that guarantees a million-dollar check every July. Instead, it requires building enough reliable income to replace the paycheck that disappears when you leave the workforce.

That's one of the biggest shifts in retirement planning. During your working years, your employer provides your primary source of income. Once you retire, you're responsible for creating your own paycheck using a combination of income sources.

For many retirees, that starts with Social Security. Others may also receive a pension, annuity payments, investment income, rental income or distributions from retirement accounts such as 401(k)s and IRAs. The right mix depends on your savings, lifestyle and retirement goals, but the objective is the same: generating enough dependable income to cover your living expenses year after year.

Bobby Bonilla's annual paycheck may be unusual, but the concept isn't. Whether the money comes from a deferred compensation agreement, a pension or an investment portfolio, retirement planning is ultimately about creating income that continues long after your working years are over.

Use the tool below, powered by Bankrate, to connect with a financial professional who can help you create a retirement strategy tailored to your goals.

Deferred income isn't just for professional athletes

Bobby Bonilla's contract may be one of the most famous examples of deferred compensation, but he's far from the only person who receives income long after the work is done.

Many corporate executives participate in deferred compensation plans that allow them to postpone receiving part of their salary or bonuses until retirement, often for tax-planning purposes. Business owners may structure the sale of a company as installment payments that provide income over several years instead of receiving the full purchase price upfront.

Deferred income can also take other forms. Employees may receive company stock that vests over time, consultants may negotiate ongoing retainers, and people who settle lawsuits may choose structured settlements that pay out over many years rather than as a single lump sum.

While these arrangements differ from Bonilla's contract, they all share the same underlying principle: delaying income today in exchange for a predictable stream of payments in the future. Depending on your financial goals, taxes and investment strategy, spreading income over time can provide greater flexibility and help create more consistent cash flow.

The real lesson behind Bobby Bonilla Day

Most people will never sign a contract that guarantees them a paycheck decades after they retire. But Bobby Bonilla Day highlights a goal that every retirement saver should strive for: creating income that continues after their working years are over.

That doesn't happen through a single contract. Instead, it's typically built over decades by combining several sources of retirement income. For many Americans, that starts with maximizing Social Security benefits by claiming at the right time.

Others may supplement those benefits with withdrawals from retirement accounts, dividend-paying investments, interest from bonds or certificates of deposit, pensions, annuities or income-producing real estate.

The best retirement income strategy depends on your goals, risk tolerance and financial situation. Some retirees value the predictability of guaranteed income, while others prefer the flexibility and growth potential of investment portfolios. Many rely on a combination of both.

Every July 1, Bobby Bonilla reminds us that getting paid long after your career ends isn't just a quirky baseball story. It's the same objective that millions of Americans are working toward: replacing a paycheck with dependable income that lasts throughout retirement.

Enjoy the check, Bobby. The rest of us have some retirement planning to do.

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Do you have a plan for how you'll spend your money in retirement? If not, join the club. Many retirees wing it when it comes to withdrawing their hard-earned savings.

But that's a big mistake, says Jean Chatzky, best-selling author of The Forever Paycheck and founder of HerMoney. It's the biggest mistake retirees can make.

"The lack of a concrete plan actually prevents them from living their best retirement," Chatzky tells Kiplinger. "They are not living as well as they could." If you overspend without a plan, you could face a retirement shortfall. If you underspend, you won't get to fulfill your retirement goals.

Reluctance to spend among retirees

Underspending is a common problem among retirees, despite large nest eggs built on a decade-long bull market. By the end of 2024, Fidelity Investments reported that baby boomers made up 41% of all 401(k) millionaires, while Generation X (ages 45 to 60) accounted for 57%.

Yet, despite healthy balances, many are wary of spending. A recent Corebridge Financial survey revealed that less than one-third of retirees feel comfortable spending their savings, with most noting that the prospect causes stress or anxiety. While Chatzky emphasizes that a detailed strategy can alleviate many of those feelings, just 14% of retirees report having a plan to manage their required minimum distributions.

"There are a number of decumulation strategies, but I'm a believer that covering your fixed costs with some sort of paycheck, some sort of guaranteed income, is likely to enable people to live better with less stress," Chatzky says.

That doesn't mean all your money should be in a guaranteed investment product such as an annuity, bonds or Treasuries, but locking some of it in a "forever paycheck is really a smart move for most people," she says.

Preretirees need a plan, too

If you're a pre-retiree, Chatzky says the biggest mistake you can make in the run-up to retirement is not having a plan.

• Do you want to downsize or age in place?
• Will you earn money or are you completely exiting the workforce?
• What about your spouse? Is he or she retiring with you?
• How do you plan to spend your free time?

You need answers to all that and more ahead of time if you want a successful retirement, says Chatzky.

"I'm always baffled by the number of couples who have very, very different retirement visions from one another," says Chatzky. "They get to the point and realize they are not on the same page at all."

Just as with buying a house or having a baby, you can't plan out your withdrawals until you know what your lifestyle looks like and how much it will cost.

Help is out there

When it comes to planning, Chatzky encourages everyone to consider hiring a financial adviser. A financial planner can map out a plan for how to spend your money in retirement or determine how much you need to save.

Chatzky said that while some people think hiring a financial planner means paying fees forever, or think they don't have enough money to need one, both notions are dated and wrong.

You can hire a financial adviser to create a plan you execute yourself, you can hire a planner to review a plan you created, or have someone do it all for you, says Chatzky.

"The whole financial planning field has become democratized in a way that I truly think there are planning services available to fit everyone," she says.

Editor's note: This article is part of an ongoing series in which we ask influential personal finance figures to share their opinion on the biggest retirement mistake you can make. Other articles feature Suze Orman, Dave Ramsey, Grant Cardone and Ramit Sethi.

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You've done everything right. You saved diligently for decades, worked with a financial planner and built a retirement nest egg that should, by any measure, fund the life you've been dreaming about.

So a few months in, why do so many new retirees find themselves feeling vaguely … restless?

There's a concept in psychology called the hedonic treadmill, and it may be the most important retirement planning topic no one is talking about. The idea is deceptively simple: Human beings have a powerful tendency to return to a stable baseline of happiness regardless of what happens to them, positive or negative. We adapt. Quickly.

That new-car smell fades. The lake house becomes just "the house." The golf game you couldn't wait to play every day starts feeling like obligation by the third month. The dopamine hit is real, but it's short-lived. And then the treadmill catches back up.

The treadmill is already running in your retirement plan

Here's where it gets personal. In my years as a financial planner, I've worked with many clients to build what we call an "intentional financial life" — defining what an ideal retirement looks like, then building the plan to get there. We reach the milestone, we celebrate. Then, almost without fail, the goal posts move.

It's not ingratitude. It's biology. The hedonic treadmill doesn't care how hard you worked or how carefully you saved. It just keeps running. And the retirement transition is one of the moments in life where this phenomenon hits hardest, because so much of your identity, your schedule, your relationships, your sense of purpose, changes all at once.

The research backs this up. Studies consistently show that retirees who anticipate a dramatic, lasting boost in happiness from leaving work are often disappointed. The first year frequently brings a genuine honeymoon phase.

But by year two or three, life satisfaction tends to drift back toward pre-retirement levels, unless something more intentional is put in its place.

Moving the goal posts isn't always a bad thing

I want to be careful here, because ambition in retirement isn't the enemy. Plenty of retirees channel the hedonic treadmill productively; they launch a second act, mentor the next generation, or build something new precisely because sitting still didn't suit them. The treadmill, in that case, becomes fuel.

The problem comes when the goal posts keep moving without intentionality behind them. Or, to put it another way, when "enough" never arrives because it's always defined by something just out of reach — a bigger portfolio number, a better house in a warmer state, one more year of work "just to be safe." That's not ambition. That's the treadmill running you.

I've seen the other side of this, too, and it's worth holding up as a model. Occasionally, a client will look at what they've built, look at their life and make a deliberate choice to step off. Not because they've given up, but because they've genuinely recalibrated what they're chasing and realized that "more" isn't the answer.

Their happiness doesn't come from the outside. It comes from an internal sense of enough. Those are the clients I learn the most from.

What the research says actually works

The good news is that the hedonic treadmill can be managed — not defeated, but worked with. Behavioral economists and positive psychologists have identified a handful of things that produce durable life satisfaction rather than a quick spike and fade.

Experiences over things. Spending on experiences, travel, time with grandchildren or learning something new produces longer-lasting happiness than material purchases. Possessions adapt into the background of your life. Memories don't.

Purpose and structure. Retirees who maintain a sense of meaning, through volunteering, part-time work, creative pursuits or community involvement, consistently report higher life satisfaction than those who treat retirement as a permanent vacation. Structure matters more than most people expect.

Social connection. Loneliness in retirement is a documented health risk. The relationships you invest in, with friends, family and community, are among the most reliable predictors of well-being in later life. No portfolio allocation compares.

Savoring and gratitude. Actively noticing and appreciating what's already good — rather than focusing on what's next, is one of the most well-documented ways to raise a personal happiness baseline. It sounds simple because it is. It's also genuinely hard to do consistently.

What this means for your retirement plan

Here's the honest truth: Most retirement plans are built around a number. Hit the number, stop working, be happy. That's the implicit promise. But if the hedonic treadmill has taught us anything, it's that the number alone won't get you there.

The financial piece matters enormously. Security is foundational, and I'm not minimizing it. But the clients I've seen thrive in retirement didn't just plan for what they'd stop doing. They planned for what they'd start. They defined what a good day looked like at 68, and then built a life — not just a portfolio — that could support it.

The treadmill keeps running. That's not a tragedy — it's just how we're wired. The question is whether you're running toward something that genuinely matters to you, or just running.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Fear gets a bad reputation in retirement planning.

We’re told not to be afraid of market volatility, not to panic when stocks fall, not to let inflation, health care costs, taxes, or Social Security headlines hijack our long-term plans.

That is good advice — up to a point.

But after decades of writing about retirement and now working as a retirement coach, I’ve come to believe that not all fear is harmful. Some fear is useful. Some fear is protective. Some fear is a signal that your financial life, family life, or future lifestyle deserves more attention. I call it "healthy fear."

The goal is not to become fearless; it’s to learn the difference between fear that paralyzes you and fear that prepares you.

Retirement is one of the few major life transitions in which people are asked to make a series of large, emotional and often irreversible decisions at almost the same time.

When should I stop working? Can I afford to spend more? Should I downsize? Should I help my children now or leave money later? What happens if one spouse needs care? What if the market falls early in retirement? What if I live to 95?

Those are not irrational questions. They are the questions serious people ask when the paycheck is about to stop.

The fear beneath the numbers

The most familiar retirement fear is running out of money. For many people, it remains powerful even when the math suggests they are likely to be fine.

Jason Dall’Acqua, founder and financial adviser at Crest Wealth Advisors in Annapolis, Md., works with many clients who have accumulated significant assets. Yet the fear of running out of money still shows up regularly.

Sometimes that fear is rooted in actual planning risk. Sometimes it comes from something deeper: a childhood where money was tight, parents never spent freely, a business setback, a divorce, a market crash, or decades of being rewarded for saving rather than spending.

Many successful retirees became successful because they were cautious. They lived below their means. They saved steadily. They avoided debt. They did not buy everything they could afford.

Then retirement asks them to reverse decades of behavior. Now the question is not "How much can I save?" It's "How much can I safely spend?"

That can be harder than it sounds.

Dall’Acqua says part of the work is helping clients see what their money can do while they are still healthy enough to enjoy it. A client may be able to afford a large family vacation, meaningful charitable gifts, or financial help for children and grandchildren. But they still may need reassurance that the plan can support those decisions.

That is where a healthy fear becomes useful. It does not say, "Never spend." It says, "Let’s understand what is sustainable."

Fight fear with facts and action

Mary Ware, managing partner and senior wealth adviser at Carnegie Private Wealth in Charlotte, N.C., puts it this way: "I try to help clients fight fear with facts and action."

Sitting in worry rarely helps. But turning worry into a planning conversation can, Ware says.

If you fear long-term care costs, start by learning what care actually costs in your area. What would in-home care cost? Assisted living? Memory care? A continuing care retirement community? How would you pay for it? From portfolio assets? Home equity? Insurance? Family support? Some combination?

If you fear burdening your children, don’t just worry privately, says Ware. Talk with them. Tell them what you want, what you are planning and what you do or do not expect from them.

If you fear market volatility, don’t move everything to cash. Ask whether your portfolio has enough liquidity to support several years of spending without forcing you to sell long-term investments during a downturn.

A little fear can lead to better questions. Better questions can lead to better planning.

Healthy fears: The 6 fears worth listening to

Some retirement fears deserve attention because they point to real planning gaps.

• Fear of outliving your money may prompt a better cash-flow plan, more realistic spending assumptions, a smarter Social Security claiming strategy or a more durable withdrawal plan.
• Fear of health care costs may prompt you to review Medicare choices annually, price long-term care options, update health care proxies and talk honestly with your spouse or adult children.
• Fear of inflation may remind you that "safe" assets are not always stable if they fail to keep up with rising costs.
• Fear of cognitive decline may push you to simplify accounts, name trusted contacts, update powers of attorney and make sure both spouses understand the household finances.
• Fear of family conflict may lead to clearer estate documents, better beneficiary designations and more transparent conversations about inheritance, charitable giving and expectations.
• Fear of losing purpose may push you to build a life before you leave a career — one with relationships, structure, health, community and reasons to get up in the morning.
  

These fears do not need to dominate your life. But they should not be ignored.

Don't let fear make the decision

The danger comes when fear stops being a signal and becomes the decision-maker.

That is when retirees go too conservative too early, hoard cash, delay retirement unnecessarily, refuse to spend, avoid family conversations, or stay in a house that no longer fits their health or lifestyle needs.

I understand the appeal of cash. It feels safe. It does not send alarming headlines to your phone. It does not drop 20% in a bear market. But too much cash can create a quieter risk: the slow loss of purchasing power.

The same is true with refusing to spend or the so-called "spending guilt." Some retirees are so focused on preserving assets that they miss the season of life when travel, family experiences, hobbies and generosity may be most meaningful.

"You can worry so much about outliving your money that you forget to enjoy your life right now," says Ware.

That does not mean spending recklessly. It means remembering that retirement planning is not only about avoiding bad outcomes. It is also about enabling good ones.

The retirement fears that arrive later

Some fears do not fully appear until after retirement begins.

At first, there may be relief. No commute. No boss. No meetings. No Sunday-night dread.

As a retirement coach, I ask clients to ponder the quieter questions. Why do I feel guilty spending money? Why do I miss being needed? Why do market headlines bother me more now? Why is my spouse adjusting differently from me? Why does every major decision — moving, helping the kids, buying a second home, joining a community — feel so permanent?

This is where retirement planning becomes more human than mathematical. A spreadsheet can tell you whether you can afford a trip. It cannot tell you whether you are emotionally ready to spend the money.

A Monte Carlo analysis can estimate the probability that your assets may last. It cannot tell you whether your adult children understand your wishes if your health changes.

A tax projection can show whether a Roth conversion makes sense. It cannot tell you whether you and your spouse have the same vision for the next 20 years.

That is why healthy fear should lead to better planning and communication, not just portfolio changes.

What healthy fear can do

When retirees take their fears seriously early enough, good things can happen. They may build a more resilient portfolio. They may create a cash reserve that helps them sleep during market volatility. They may update estate documents before a crisis. They may buy or reject insurance with clearer eyes. They may start giving money during their life instead of waiting to leave an inheritance. They may have the family meeting they have been avoiding.

They may also make better lifestyle decisions about whether to downsize, move closer to family, or take that major trip before turning 75 while they are still healthy.

These are not just financial decisions. They are life decisions with financial consequences.

Fear, in the right dose, can help you pay attention. The key is to ask: What is this fear trying to tell me?

If the answer is, "Sell everything and hide," take a breath.

But if the answer is, "Update your plan, talk to your family and financial adviser, understand your risks, protect your spouse and start living more intentionally," then maybe that fear is not your enemy.

Maybe it is one of the tools that helps you retire better.

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Even the best-laid retirement withdrawal plans can’t foresee every expense that crops up. When you need extra cash for unforeseen costs, knowing where to turn can be paralyzing. After all, every financial move comes with tax implications that ripple well into your future.

Should you sell stocks in your brokerage account, or flip the family lake house? Is it time to finally get rid of the boat you keep meaning to take out, or should you drain a Roth IRA instead?

"When you need cash in retirement, it requires a balancing act," says Patrick Marcinko, a financial advisor at Bogart Wealth. "Don't rush. There's a timeline and a deadline, but you really need to take an objective look at all your assets and what the tax implications are."

In a perfect world, you’d have a cash reserve carved out for the unexpected. But if you don't, some assets are far better to tap than others. From brokerage accounts to lifestyle vehicles, here is a look at which assets to sell first when you need extra money.

1. Investments in your brokerage account

When withdrawing money in retirement, Marcinko says retirees must be mindful of the potential tax hit, which is why a taxable brokerage account is typically a better first choice than a traditional 401(K) or IRA. Long-term capital gains tax rates, which top out at 20% for the highest earners, are substantially lower than ordinary income tax rates, which apply to traditional retirement account withdrawals.

Taking money from the wrong bucket can easily push you into a higher bracket, triggering higher Medicare premiums and even taxes on your Social Security benefits. To avoid this, try to minimize capital gains by employing strategies like tax-loss harvesting and avoiding selling your most highly appreciated assets, says Patrick Shope, Certified Wealth Strategist and founder of Shope + Associates. It's better to pick and choose to ensure you aren't creating a bigger tax event than necessary.

2. High-fee and redundant funds, stocks and investments

If you're tapping a brokerage account for extra cash, start by trimming the fat. Sell off high-fee funds, redundant holdings and underperforming assets that could harm your overall portfolio over the long term.

However, be mindful of timing, says Marcinko. If you sell during a down market, you risk locking in losses. This causes sequence of returns risk, leaving your remaining portfolio with a smaller base to recoup those losses, which can cause a structural shortfall later in your retirement.

3. Concentrated stocks that have done well

Cutting back a very concentrated position may seem like a no-brainer, especially if you own big-name tech or AI stocks that have surged in value over the past few years. While it may make sense to sell the stock from a diversification perspective, you must carefully navigate the tax implications.

If the stock is held inside a traditional 401(k) or IRA, selling the asset won't cause an immediate tax event, but withdrawing the cash from the account will subject it to ordinary income tax. Even if the stock is in a Roth 401(k) or IRA, where withdrawals are tax-free, cashing out now permanently impacts the tax-free compounding advantage that would otherwise benefit you and your heirs. If you do sell a concentrated stock position in a taxable account, Shope suggests doing it gradually to minimize your annual tax liability.

4. Unused lifestyle vehicles (boats, RVs, motorcycles, and extra cars)

If you can't remember the last time you took your boat out on the water or your RV has sat in the driveway for years, it is safe to put those lifestyle vehicles up for sale. Finding a buyer won't always be a quick or easy way to get immediate cash, but it frees up significant equity.

Unused lifestyle vehicles represent unique vulnerabilities in a portfolio: they actively drain your cash flow through ongoing maintenance, storage and insurance expenses without bringing you actual joy.

Nonetheless, they aren't usually high on financial advisers' lists of what to tap first because they are illiquid, require work to sell, and can be emotionally hard to part with. "If it hasn't moved off the lot in 36 months, you have to commit to having more fun (with it) or selling it," says Marcinko.

5. Rentals or second homes

Real estate is another asset that isn't easy to sell. It carries substantial tax and family implications, especially if you originally planned to pass the property down to the next generation. However, it can also generate serious capital.

If you are considering selling real estate, the decision often comes down to whether the property brings you joy or stress. If it's the latter, then selling makes the most sense.

"If every time the phone rings you think something is wrong with the house, that's a lot of juice not worth squeezing," says Marcinko. "You want to get out of the real estate business and start living the retirement life."

Consider the big financial picture before selling

When selecting assets to sell, resist the temptation to just pick the stock with the biggest run this year or the fund with the highest expense ratio. Instead, put in the work and look at your entire financial picture, considering what the sale will mean from a tax and savings perspective, both now and in the future. Will it impact your Medicare premiums and Social Security benefits today? If you withdraw the money now, will you have enough to live on tomorrow?

"One of the biggest mistakes retirees make when they need cash in retirement is to sell whatever is the easiest to sell instead of what is the smartest," says Shope. "So much of it is around distribution planning, tax planning and Medicare planning. It's not just about having the money. It's about having the right money at the right time with the right tax situation."

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The country may be turning 250 this summer, but many Americans didn't start taking retirement savings seriously until it turned 200.

Before that, pensions and Social Security were the primary means of support in old age, but as both declined or faced financial strain, new mechanisms emerged. From the mid-1970s through today, a lot has changed in how Americans save for retirement. For good reasons: We are living longer, and retirements are stretching on for decades.

As we commemorate America's 250th or semiquincentennial birthday, here's a look at how saving for retirement has evolved over the years.

1960s-mid-1970s: Pensions are all the rage

During the 1960s, many workers stayed with one company for their entire career and, in return, received a paycheck for life once they retired. These pensions were common throughout the 1960s and early 1970s —particularly in public sector jobs and heavily unionized industries like manufacturing, automotive, and steel — and served as the primary way Americans supported themselves in retirement.

They were supplemented by Social Security payments and personal savings, which people typically put into bank savings accounts and U.S. savings bonds. Life expectancy was also around 70 in the 1960s, which meant individuals needed to save less. Plus, the cost of goods and healthcare was a lot lower than it is today.

1975-1980: Tax-deferred saving is born

By the mid-1970s, traditional pensions were on shaky ground, and Americans realized Social Security wasn't enough to live on in retirement. While some employees had access to profit-sharing or money purchase pension plans, many didn't — and employers were scaling back those offerings. Concerned that workers weren't saving enough, Congress stepped in and passed the Employee Retirement Income Security Act (ERISA) in 1974. In January 1975, the first IRA was introduced.

Initially, any individual without access to a company pension plan could contribute up to 15% of their salary, or $1,500 per year, to their IRA. They could take a deduction on their tax return, and their contribution would grow tax-deferred. If anyone withdrew the money before 59-½, they would have to pay a 10% penalty. This was designed to encourage savers to keep the money in their IRA until they reached retirement age.

Three years after the IRA was introduced came yet another way to help workers save for retirement, the 401(k). It was first introduced as a provision in the Revenue Act of 1978, allowing employees to choose to receive a portion of their income as deferred compensation, and created tax structures around it.

In 1980, Ted Benna, who is known as the "Father of the 401(k)," encouraged his consulting firm to create the first 401(k) plan for employees, and it took off from there. Over the decades, there have been changes and upgrades made to the 401(k).

Early 1990s: Set-it-and-forget-it with Target Date Funds (TDFs)

Designed as a set-it-and-forget-it type option for 401(k) participants, the first target-date funds, called LifePath, were introduced by Wells Fargo and Barclays Global Investors in March 1994. Built around a specific retirement year, these funds automatically shift toward more conservative holdings as the saver ages to protect their principal. Once the target date is hit, the portfolio permanently settles into a low-risk income allocation.

The structure has proven incredibly popular. According to Morningstar, TDF assets in the U.S. alone surged to $4.8 trillion by the end of 2025.

1989–2001: The Roth debuts

Aiming to generate immediate federal revenue while also giving everyday Americans a way to avoid future investment taxes, Senators Bob Packwood and William Roth first proposed the 'IRA Plus' plan in 1989. It allowed for after-tax contributions to an IRA that would grow entirely tax-free.

It wasn't until eight years later that the plan was codified as the Roth IRA under the Taxpayer Relief Act of 1997 and made available to the public in 1998.

While initial contributions were modest, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 substantially raised those caps, introduced catch-up contributions for savers 50 and older, and paved the way for future inflation indexing.

2006: Auto-enrollment thanks to the Pension Protection Act

Offering 401(k) plans is one thing, but getting workers to take advantage of them is another. Facing low adoption rates among employees in America, Congress tried to change that at the start of the 21st century by introducing auto-enrollment of 401(k)s.

A key provision of the Pension Protection Act of 2006, auto-enrollment allowed employers to automatically enroll new eligible employees into the company's 401(k) plan at a default contribution rate of typically 3% of their salary, unless the employee opted out.

The idea was that employees wouldn't notice a 3% deduction from their paychecks and were unlikely to opt out of their plan. As a result, auto-enrollment would force employees to save for their retirement.

Since then, 401(k) participation rates for companies utilizing this feature have jumped from roughly 44% to 86%, according to T. Rowe Price.

2010s: The DIY era

Driven by the smartphone boom and financial technology, or fintech, the 2010s democratized how everyday Americans saved for the future. For the hands-on investor, mobile trading apps made it fast, cheap and easy to build a self-directed retirement portfolio of stocks and ETFs without a financial adviser.

The decade also saw the rise of the robo-advisor. These platforms used automated algorithms to manage and rebalance a user's portfolio for a fraction of the cost of a human adviser. Spurred by a deep mistrust of traditional financial institutions following the 2008 Great Recession, and appealing to a younger generation with low minimum account requirements, robo-advisors proved that you didn't need a massive net worth to access sophisticated wealth management.

2020s: Step up savings with the Secure Act and Secure 2.0

Despite decades of efforts to get people to save for retirement, by the end of the 2010s, it was apparent that millions of Americans were still falling behind on retirement readiness, with many lacking access to a workplace retirement savings plan. People were also living longer and working later in life. To help workers shore up their retirement savings and account for the current lifespan and lifestyle of Americans, Congress passed the Secure Act and later the Secure 2.0, which addressed those retirement issues and more.

Both acts ushered in many changes to retirement savings, including:

-Pushed back Required Minimum Distributions (RMDs) from 72 to 73, with the age to reach 75 by 2033.

-Expanded catch-up limits for older workers between the ages of 60 and 63.

-Allowed employers to legally make matching contributions into a worker's 401(k) based on the employee's student loan payments, even if the worker can't afford to contribute their own salary.

-Allowed long-term, part-time employees to participate in workplace retirement plans after two years instead of three years.

-Allowed savers to withdraw up to $1,000 once per year out of their retirement accounts for an urgent personal financial emergency without triggering the traditional 10% early withdrawal tax penalty.

-Made Roth accounts within employer-sponsored workplace plans exempt from mandatory lifetime withdrawal rules.

More to come

A lot has happened to the American retirement landscape over the past few decades, and even more changes are on the horizon. Moving forward, the next era of retirement savings will likely be influenced by AI, mobile algorithms and digital assets like cryptocurrency.

As the nation steps into its next chapter, one thing remains certain: the tools we use to build our nest eggs will continue to evolve, promising many more decades of change to come.

More on America's 250th Birthday

• America's Cost of Living at 200 vs 250: How Affordable is American Life Now?
• America at 250: The 3 Economic Headaches That Haven't Changed Since 1976
• How Has Retirement Changed in the Last 50 Years? Take Our Quiz
• 9 Historic Sites to Visit With Your Grandkids for America's 250
• Financial Advice From America's Founding Fathers
• Which Presidents Are on the Social Security Payroll?

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Think back to the summer of 1976. Sunday afternoons meant tuning in to hear Casey Kasem count down the biggest hits in the land, while neighborhood streets were filled with kids on skateboards wearing striped tube socks pulled up to their knees. It was a season steeped in a collective, slow-building excitement as the entire nation braced for its 200th birthday.

Over in Manhattan, the newly opened Twin Towers stood as shiny symbols of modern architectural ambition, serving as a soaring backdrop for the massive parade of international Tall Ships that came to celebrate America's Bicentennial as part of Operation Sail.

But if you peer past the high-gloss, star-spangled veneer of that 200th birthday, you find an American consumer operating in a completely different financial universe. As we gear up for America 250, comparing what it actually took to fund the American Dream fifty years ago reveals a stunning disconnect between historical nostalgia and modern economic reality.

Prices in 1976 vs 2026

Evaluating the modern consumer economy requires separating nominal price increases from true shifts in purchasing power. While cumulative inflation over the last fifty years sits at approximately 485%, certain core sectors have experienced hyperinflation that completely defies standard CPI metrics.

The 1970's saw the inflation rate seesaw throughout the decade. The overall inflation rate in 1976 was 5.76%, down from 9.1% in 1975. It had two double-digit peaks, hitting 11.1% in 1974 and rebounded to 11.3% in 1979. Inflation wouldn't fall below the 1976 rate until 1983, when it fell to 3.2%.

The following data highlights the gap between the 1976 dollar, its inflation-adjusted equivalent and the actual out-of-pocket reality confronting households today.

The top choices in 1976

If the financial data reminds us of what we’ve lost in purchasing power, a look back at the pop culture leaderboard reminds us of how much the American lifestyle aesthetic has evolved.

Even in the absence of Cable TV, VCRs and video games that were hallmarks of the 80s, several high-profile events in 1976 captured Americans' attention, including a visit from Queen Elizabeth to celebrate the Bicentennial and the Montreal Olympics. Bruce Jenner (now Caitlyn Jenner) won the gold medal in the men's decathlon at the 1976 Summer Olympics in Montreal with a world record-breaking point total and bested his Cold War rival, Nikolai Avilov.

From the most popular family vehicle to the top of the box office, here is a quick snapshot of 1976's cultural footprint.

Now vs then

Ultimately, a nation's true resilience isn't measured solely by the numbers on a balance sheet, but by its capacity to adapt, reinvent and progress. For the generation that celebrated the Bicentennial, that unstoppable American energy was perfectly personified by Bruce Jenner sprinting across the finish line to secure a world-record Olympic gold that glorious July.

The data from the last fifty years shows just how much the economic landscape has evolved. As we look past the easy nostalgia of 1976 and celebrate America's 250th anniversary, the true celebration lies in that timeless spirit of renewal — proving that our ability to overcome the financial obstacles of the present is exactly what paves the way for a brighter tomorrow.

More on America's 250th Birthday:

• America is Turning 250 — But We Didn't Get Serious About Saving for Retirement Until 50 Years Ago
• America's Cost of Living at 200 vs 250: How Affordable is American Life Now?
• America at 250: The 3 Economic Headaches That Haven't Changed Since 1976
• How Has Retirement Changed in the Last 50 Years? Take Our Quiz
• 9 Historic Sites to Visit With Your Grandkids for America's 250
• Financial Advice From America's Founding Fathers
• Which Presidents Are on the Social Security Payroll?

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