The full retirement age — that is, the time when you can collect your maximum Social Security benefits amount — is 66 or 67, depending on when you were born. So for baby boomers, the generation born between 1946 and 1964, retirement is either quickly approaching or has already arrived.
But while the oldest boomers are around 77 years old, the youngest haven’t quite hit 60 yet. This is a few years too soon to begin collecting even partial Social Security benefits, which start as early as 62 years old.
This doesn’t stop many baby boomers from wanting to retire early, however. After all, early retirement comes with quite a few benefits — such as more time to pursue hobbies or interests and freedom from the workforce. Plus, retiring early can be beneficial to their health and overall well-being.
Unfortunately, many boomers can’t retire early even if they want to. While there are many possible reasons for this, GOBankingRates asked the experts what the most common ones are. Here’s what they said.
They’re Still Paying for Their Adult Children
Many boomers can’t retire early because they’re still helping their adult children financially.
“They wanted to help their kids launch their careers when they graduated college and helped them pay their rent in a high cost-of-living city to supplement their low salary, but now they’re nearing 30 and the boomer parents are still sending them money regularly,” said Carla Adams, founder and financial advisor at Ametrine Wealth.
Providing financial support for a while makes sense in a lot of cases. It can also be a great way of helping one’s children launch into adulthood successfully. But at a certain point, it can set the person giving that support back financially — and delay their retirement.
For those who want to retire early, it’s time to cut back on the financial support and support them in other ways.
“While parents want to help their kids out, truly the best support they can give them is emotional support,” said Adams. “Listen to them, be a shoulder to cry on and pass on whatever wisdom they’re willing to take from their Boomer parents about pinching pennies and being financially independent.”
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Their Debt Keeps Them Working
Debt is a major contributor to delayed retirement, and for boomers who’ve been living beyond their means, this is an even bigger problem.
“Living beyond your means is a double whammy: you, of course, end up not putting much if anything away in savings, but also you then become accustomed to this inflated lifestyle and it becomes very difficult to cut back,” said Adams. “Taking on too much debt — particularly credit card debt — only adds to your problems as high interest rates make paying own the debt increasingly difficult.”
Other types of debt, like mortgages or auto loans, can also keep boomers from retiring early. After all, more debt usually means higher monthly expenses. This can be especially problematic for boomers who can’t start collecting their Social Security benefits yet, or who are going to have very limited income during retirement.
Making some changes to your budget and spending habits can help get you back on track with your early retirement goals. Even a few cutbacks can free up more cash for any debts and make them easier to manage or pay off.
“If you’re already in your 50s and 60s, start by paying down debt with the highest interest rate first before moving on to paying down debt with lower interest rates,” suggested Chris Urban, CFP, founder of Discovery Wealth Planning.
Medical Expenses or Health Concerns
For boomers who have extensive or chronic health conditions that cause them to rack up medical debt, it might be tough to retire early. And if they have an employer-sponsored health plan that covers their medical treatments, leaving the workforce could be detrimental to their finances later.
But whether high-cost medical bills or other health-related concerns are preventing early retirement, there are still some things boomers can do.
“A suggestion might be earmarking a particular investment and/or retirement account specifically for unexpected health costs,” said Urban. “This could be a Roth IRA or simply a separate, taxable brokerage account designated to cover expenses for this risk specifically. This is helpful from a behavioral perspective so that you can see the funds separate and available if/when any unexpected issues arise.”
Poor Investment Decisions
Having a diverse investment portfolio is one of the more commonly recommended ways of building financial security in your later years. But for boomers who either don’t have many investments, or who’ve made some bad or risky decisions, it can be hard to retire as planned.
“Whether it’s making bad stock picks, trying to time the market and missing, or going in on some deal their friend said was a sure win but wasn’t — these types of mistakes can really set people back on their retirement goals,” said Adams.
Lack of Financial Discipline or Excessive Spending
Frivolous or excessive spending can prevent early retirement for a lot of people, as can trying to keep up with the Joneses.
“Whether driven by ego or simply just having an interest in nicer things, Boomers’ spending habits could force them to work longer than is necessary,” said Urban. “Perhaps you like to dine out a lot, drive nice cars, live in a luxurious home, etc. A more disciplined approach to spending might allow for earlier retirement.”
Boomers who lack financial discipline and base their spending decisions on what others appear to be doing can also experience a delayed retirement.
“I’ve seen a lot during my career, and I can tell you that most people who appear to have lots of money and spend big often have little to no savings and probably also quite a bit of debt. Or sometimes, people who you think must be in a similar financial situation as you actually make quite a bit more money, have family money or maybe even won a big settlement from a lawsuit which they’ve decided to keep private,” added Adams. “Focus on yourself and the things that are really important to you, rather than trying to impress others.”
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This article originally appeared on GOBankingRates.com: I’m a Financial Planner: Here Are the 5 Most Common Reasons Baby Boomers Can’t Retire Early