3 Money Mistakes Baby Boomers Are Making — The Motley Fool

The oldest baby boomers have already made their transition into retirement, and the youngest are on their way. They now face the prospect of some well-deserved R&R after several decades in the workforce — but poor financial planning could derail that for some.

Baby boomers are on track to live longer than any generation before them, which means their dollars will have to stretch much further in retirement. But those who fail to plan for this may find their financial security in jeopardy at the time when they need it the most. Here are a few of the most common money mistakes baby boomers are making, along with some suggestions on how to fix them.

Senior couple examining bills and looking worried

Image source: Getty Images.

Underestimating how much money they need to save for retirement

In the past, Americans’ retirement savings only had to see them through the last 10 years or so of their lives. But the average life expectancy of today’s 65-year-olds is 84 for men and 86 for women. That means your savings may need to last 20 years or more. This can put a strain on your finances, and it will only get worse if you end up with a serious illness that requires long-term care.

It’s important to think realistically about how much money you’ll need in retirement, preferably before you get there. First, figure out how much money you’ll need to live on each year. Then factor in the expected inflation rates and how long you expect to live. Of course, you won’t be able to predict this for sure, but most experts recommend assuming a 3% inflation rate per year. That means that if your living expenses come to about $40,000 this year, next year they may cost $41,200 due to inflation (that’s $40,000 plus 3% of $40,000). And the year after that, they may cost $42,400. Using an inflation calculator such as this one, you can plug in your current expenses, the year you plan to retire, and the anticipated inflation rate. The calculator will show you what your expenses may be in the future.

Now that you’ve estimated your annual retirement income need, you can figure out how much money your independent savings will have to provide each year. Just subtract the income you’ll receive from other sources — Social Security, pensions, annuities, and anything other than your own nest egg — from the amount of income you’ll need each year. The resulting amount will need to come from your own accounts.

If it doesn’t look as if your savings are on track to provide that income every year for a couple of decades or more, then you may need to save and invest more aggressively. Fortunately, savers over age 50 are allowed to contribute up to $6,500 per year to IRAs and $24,500 to 401(k)s to help them catch up on their retirement savings. (The contribution limits for savers under age 50 are $5,500 and $18,500, respectively.)

If you’re concerned that you may need long-term care at some point, consider adding long-term care insurance to your retirement plan to help cover these costs.

Overestimating Social Security payments

A third of baby boomers expect Social Security to become their primary source of income in retirement, according to a Transamerica study. But what most don’t realize is that Social Security was only ever meant to be supplementary. In fact, for most people, it only covers about 40% of pre-retirement income. If you haven’t been saving enough for retirement on your own, you could find yourself facing some lean times ahead. But you can avoid this problem by calculating how big you can reasonably expect your Social Security payments to be.

Your Social Security benefits are calculated based on your average inflation-adjusted monthly income during the 35 highest-earning years of your life. There are several calculators that can help you figure out how much you can expect. But if you want the most accurate estimates, create a my Social Security account on the Social Security Administration website.

Your monthly Social Security amount will also depend on when you begin taking benefits. The Social Security Administration designates your full retirement age based on the year you were born, and at that age, you’re entitled to receive 100% of the retirement benefit you’ve been promised.

For baby boomers, full retirement age will be somewhere between ages 66 and 67. You can begin drawing upon your Social Security benefits at age 62, but you’ll receive 25% less per check if your full retirement age is 66 for starting this early. If your full retirement age is 67, you’ll receive 30% less per check. For every month that you delay taking Social Security, the amount you’ll receive per check will grow until you begin receiving 100% of your benefit at your full retirement age.

But you don’t have to stop there. You can continue delaying benefits past your full retirement age, and your checks will continue to grow, all the way up until you reach the maximum benefit amount at age 70. This will be 124% of your designated benefit amount if your full retirement age is 67 and 132% if your full retirement age is 66.

Social Security alone won’t cover your expenses, so it’s important to make sure you have other retirement savings to supplement your retirement benefits.

Failing to diversify investments

More than half of baby boomers have 70% or more of their investments in stocks, according to financial technology company FeeX. This is a risky strategy, because if the stock market enters another decline, the value of these investments could plummet, leaving you without money when you need it most.

Investing in stocks is a great way to grow your nest egg, but it’s important to diversify so that if one of your investments takes a hit, you don’t lose everything — especially when you retire and start relying on your portfolio for regular income. Most financial planners recommend that baby boomers limit stocks to a maximum of 60% of their portfolio and fill the rest with bonds, money market funds, and other low-risk investments.

Regardless of what you invest in, it’s important to take the time to learn about sound investment strategies and how to choose the best investment products for your risk profile. Those who are not confident or not interested in doing this should consider asking for help from a more informed family member or a financial advisor.

For baby boomers, thorough financial planning can mean the difference between a relaxing retirement and a stressful one. Take the time to determine how much you need to see you through the rest of your life and make adjustments as necessary. And don’t be afraid to ask for help if there’s something you’re unsure about. Now isn’t the time to take unnecessary risks.

How to Choose the Best Senior Care

It can be hard to admit when you get to an age where you have trouble with tasks that were once simple. You do not want to burden anyone, but taking care of your home plus running errands is starting to become overwhelming. Maybe you've started to forget things and you're afraid of what might happen. What do you do?

Luckily, today's options for senior care are better than ever. It's easy to find a care plan suited for your specific needs.

First, identify which type of living arrangement fits you best. There are a number of different care options.

Types of Senior Care

– 55+ communities generally offer the most independence. You may rent or own your home within the community, and there are usually amenities and activities suited for your lifestyle.
– An independent living facility, or senior housing, also offers you the freedom and comfort of a private residence, but some assistance with daily tasks may be offered.
– Memory care facilities can help take care of you if you are suffering from Alzheimer's disease or have other memory-impairing conditions.
– Assisted living is a good option if you need a little more help with day-to-day chores. Usually meals, laundry, and cleaning are provided, but you still have your own space.
– If you require 24-hour medical support, nursing homes (now known as Skilled Nursing Facilities) have around-the-clock nursing staff to ensure you're always cared for.
– Hospice facilities offer compassionate, skilled care to make the transition easier for you and your loved ones.

Choosing a Facility

Once you decide which type of senior care is best for you, do some research to find communities or facilities you like. Factor in the location, the amenities you prefer, and what fits your budget. Narrow down the options to a small list.

It's very important to visit a facility's site before you make the decision to move there. Make a list of questions before you go. Some questions might include:
– Does the location match the advertising?
– How does the environment fit my lifestyle?
– What is the overall atmosphere?
– Do the other residents seem content?
– Are the public areas comfortable and clean?
– Is the staff friendly?
– Do the staff seem to listen to my concerns?
– Can my family easily visit?
– How close are my preferred doctors and hospitals?
– How much privacy and independence will I maintain?

No matter what level of care you need, chances are that you will find the perfect senior care facility for you. Be proactive, do your research, and be honest with yourself about your needs and abilities. Most importantly, find a place that makes you feel comfortable. At this stage in your life, you deserve to relax and let someone else help you.

This Company Couples Up Aging Baby Boomers And Younger People—As Roommates

Audio: This Company Couples Up Aging Baby Boomers And Younger People—As Roommates

The Denver-based startup Silvernest pairs up empty nesters with young people or other aging baby boomers for housing.

Rising rents and property taxes in the Denver metro hit the city’s aging population especially hard. As more seniors struggle to afford their homes and live independently, many also have more empty rooms available.

That’s where the Colorado startup Silvernest comes in. The company helps seniors stay in their homes longer by pairing them up with roommates who are often younger. Some renters further reduce their monthly rate by providing services such as transportation, housekeeping and yard work for their elderly roommate.

Silvernest CEO Wendi Burkhardt and AARP Colorado executive councilman Ben Moultrie talked to Colorado Matters about the unique needs of aging homeowners.

This interview is a part of the Colorado Matters Disruptors series.

Baby Boomers face challenges in selling Tucson homes

TUCSON, Ariz. –

Baby boomers are getting older, many looking to downsize, moving into assisted living and possibly changing their housing choices altogether. Now, real estate experts at the University of Arizona believe boomers may face some challenges in selling their homes. 

Chris Nelson, a professor of urban planning and real estate development at the University of Arizona, analyzes housing and long-term residential trends and how they affect certain areas in the country. He is also a baby boomer.  “As we grew up in the suburbs, we understood them, we raised our own families there,” he said.  

He explained that many baby boomers moved their families to Tucson’s suburbs during 1960’s through the early 2000’s. But now, as boomers age and look for smaller housing options, he is worried about who might buy their homes.  “A major concern is that as boomers age, will there be enough people behind us willing to buy our homes?” Nelson said. He believes the answer to that concern is there probably will not be enough buyers, saying there are about 27-million boomers nationwide that will be selling homes between now and 2036. Nine-million of those sellers will not be able to find buyers, with thousands of them being right here in Tucson.  “So the seniors are going to have to sell the homes to syndicates that rent the homes, to renters, or in some cases, especially in the northern states, leave the homes and let them fall to the ground,” Nelson said. 

Although real estate experts say Tucson won’t be affected as much, there still is a small concern for older baby boomer homes that are 15 miles from downtown, that will take a little longer to sell. According to Nelson, the distance is a big issue. “Young families typically want to be a little closer in, closer to schools, shopping and so forth,” Nelson said. 

That’s why he recommends baby boomers sell soon, if they have a chance, and not be too greedy.   “Sell for a good price and leave…Take your time, sell, but don’t plan on making a lot of money. If you sell, it’ll be for a reasonable price, maybe less than what you paid for,” Nelson said.


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Robots In Hospitals – New Challenge For Nurses and Health Care Professionals

Three insect-like robotic arms reaching into the chest cavity of the patient lying on the surgery table hum quietly while … the surgeon is sitting in a near remote-control booth, carefully directing the delicate operation from a distance with a 3-D precision that was not possible before.

Or, here is the 5-feet high porter robot with blinking lights, moving slowly on its rubber wheels through the crowded hallways of a hospital … it is quietly waiting for the elevator to arrive so it can deliver the blankets it's carrying to the nurse station on the top floor …

Such scenes will become increasingly frequent in the hospitals of the future.

But guess what? Such a development was prophesied over a hundred years ago by the early pioneers of the 19th century political economy – that in a capitalist market, any given set of manual skill will eventually get replaced by machines for higher productivity and profits. And that creates both new pressures and opportunities for the healthcare work to renew itself through new training and career planning.

The inevitable trend is already visiting our hospitals in a form that will certainly impact the way our nurses and healthcare professionals will be trained and employed in the near future: robots are taking over an increasing number of functions, ranging from critical surgical operations to the delivery of various items around a hospital.

Robots, whether used in delicate surgery or just to carry goods around the hospital, are here to stay. This trend will eventually both present new challenges for some of our nurses as well as provide them with new and exciting venues to ratchet their credentials to new heights of professional excellence.

That's why in our hi-tech future, the education and on-the-job training of our nurseries will be more important than in any other period in history.

The Case Against Electing A Baby Boomer As President In 2020

Getty Image

We’ll start with a disclaimer. Blanket statements about entire generations don’t work. Not all Millenials like avocado toast and not all Boomers wrecked the economy. (Besides, generalizing about generations is a Boomer trait.)

With that said…Hey America, maybe let’s not elect a Baby Boomer in 2020?

Especially not a “leading edge” Boomer born in the first half of the generation like Donald Trump, George Bush Jr., and Bill Clinton (Barack Obama was born as a person of color at the tail end of the Boomer years, his experience of American life was clearly different from his generational cohorts). Maybe as the conversation around this next election ramps up, we listen to Pete Seeger’s famous hippie anthem “Turn, Turn, Turn!” and remind any older Boomers (or members of the Silent Generation) running for president that “to everything there is a season; and a time to every purpose under heaven.” Or, to be blunter, perhaps we take a phrase from the same book of the bible that Seeger borrowed his lyrics from and remind ourselves that: “One generation passeth away and another generation cometh.”

Not that we want the Boomers to passeth away. It’s just that they’ve controlled the presidency for 25 years running. They’ve had plenty of time to enact their agenda. It’s time for a new era of leaders to run things.


To understand why the world is so down on Baby Boomers right now — especially the first wave of post-WWII babies, born from 1946 to 1955, you have to look at the promises they made when they came of age in the late 60s, the wealth they cut corners to create in the 70s and 80s, the protections they gave themselves in the 90s, the tax burdens they dodged in the early 2000s, and the failed policies they kept in place since the George W. Bush administration — a 20-year-span when (in a generation-by-generation comparison) they controlled the House, the Senate, and the Oval Office.

Economically speaking, the once idealist, commune-dwelling Boomers have offered a 40-year masterclass in wealth capture. They decimated quality of living for the middle class (this will perhaps be their most lasting and haunting legacy) and increased the wealth gap dramatically, by feathering one hell of a nest for themselves. The corporations they took charge of lifted the 1% to oligarch-levels of income. They are on pace to withdraw more from Social Security than any generation ever, and yet — because of their tax-obsession during the 80s, 90s, and early 2000s (which came about because their parents began to die and they wanted to gobble up their windfalls without interference) they have contributed relatively little. They are the generation of leveraged buybacks, excess debt, and stock dividends — the sorts of financial tools that have helped turn our economy into a “get what you can now and let it burn later” system.

Speaking of letting it burn later, the Boomers wreaked absolute havoc on the environment. That drastic wealth creation? It came with an environmental cost. The rampant oil use, factory farming, and overall ecological corner-cutting are all part of what helped Boomers (and their parents) generate wealth at such a rapid pace. It’s ironic that Boomer icon Al Gore kickstarted the green revolution in 2007 with An Inconvenient Truth, and a shame that he didn’t call his own generation out for the policies they enacted to push us toward ecological collapse. Of course, Gore’s post-Oscar fiasco — with his huge electric bill coming to light and then being explained away with trite lines like “every family has a different carbon footprint” — is peak Boomerism. This is the “do as I say, not as I do” generation, full of people who believe that their lofty 60s ideals still deserve some sort of respect, though there is no empirical evidence to suggest that they kept their promises. Meanwhile, the true costs of climate change (which will be financially devastating) will be passed to future generations.

Twitter @sophxthompson


An interesting thing happened when Sean “Puffy” Combs (then called simply Diddy) went on Hardball with Chris Matthews to defend his Vote or Die campaign after the 2004 election, in which a Boomer — whose legacy is starting a war he couldn’t afford for reasons that didn’t pass muster — ultimately won. Matthews challenged Puff with a question about whether his efforts felt like a failure because John Kerry (who Matthews assumed Combs wanted to win) had lost. It felt like a big “gotcha” moment, but the rap mogul played it cool. “We got a million young people to vote with two candidates who didn’t speak to us or our issues and concerns. Just wait to see what happens when we find someone who will.”

This, ultimately is why the Donald Trump needs to be the last of the Boomer presidents. Because, as Trumpism makes so blatant: the Boomers have never been able to bring themselves to care about any generation but their own. Their failure to understand the true burdens they owe to the tax system, long-term macroeconomics (just look at what they’ve done to the GDP-to-debt ratio!), and the massive toll that their consumerism and financial single-mindedness will have on the country make them unfit to lead a generation that will absolutely have to deal with the fallout of these problems.

Theirs was a generation that was always told “your lives and your world will be better than the lives your parents had” — they are horribly ill-equipped to govern a generation who have had it drummed into their heads that “you’ll never have it as good as your folks did.”


Boomer selfishness is not endemic to the generation itself, of course. The generations before the Boomers benefitted from a world where being white and a male was (bar a few outliers) the only viable means of upward mobility. In fact, if we were making the case for Boomers, it would start with the Civil Rights movement and their efforts to break down the massive systems of white male supremacy that have plagued our nation since its inception. But even here — at the moment of their greatest success — the leading-edge Boomers didn’t go far enough. Just look at how incomes for people of color and women have stagnated over the past three decades. As an aggregate group, the most powerful members of the generation have acted like an 80s movie deadbeat dad, making big promises and then speeding off in a fancy car, leaving the rest of us (particularly minorities, the uneducated, and the lower middle class) to stare listlessly after them.

The big ideas of the 60s were indeed thrilling, but they were compromised or forgotten as white, male Boomers raced to accumulate wealth over the subsequent decades.


So if not the Boomers, then who? Tulsi Gabbard and Kamala Harris would bring brand new voices to the White House. Alexandria Ocasio-Cortez is a vocal, passionate leader who understands the pressures put on her generation. Surely a certain degree of experience will be important for someone running against an incumbent president, but by 2020 that president will still only have four years as an elected official to his name in total. It speaks to our paucity of imagination that the names Democratic poll respondents came up with were all leading-edge Boomers or pre-Boomers that have already had plenty of time to make their imprint on the nation — Clinton, Biden, Sanders, Warren. The idea of our society trusting this group to change behaviors that they have shown literally no indication of changing over the course of two and a half decades with a complete stranglehold on the federal government is a sign of our own willingness to be charmed by the marches and speeches they made “back in the day.” Perhaps someone without elected experience, like late-boomer William H. McRaven, — who led the mission to kill Bin Laden — would offer a conciliatory middle ground if one is absolutely needed.

And here’s the thing: it very well might be needed. Because if Boomer’s inhabit the “American exceptionalism” that their appointed representatives always speak of in any one way, it’s this: They vote. Though they are no longer the largest demographic in the nation, yet they remain, far and away, the largest active voting block. And when they vote, they vote with their interests in mind, oblivious to the effects that their selfishness will have on future generations.

That is where to begin if we want to keep Boomers out of the White House in 2020: Be like them. Get involved and register to vote and, in doing so, to make our influence felt. Demand, as Puff Daddy did back in 2004, that candidates speak to our needs.

Of course, once in power, the onus will shift to a degree. Boomers will still have their hordes of gold and high-value houses (benefitting from a market that they artificially inflated and the treasury bonds that made them rich). What they do with those as they retire en masse is yet to be seen. Maybe with all their free time and disposable incomes they’ll begin to think about collective legacies and healing the world they were instrumental in breaking.

Meanwhile, Gen Xers and Millenials, once in power, will be faced with the same “short-term benefit vs long-term benefit” decisions that the Boomers failed to navigate. They’ll have to choose investment in America’s future over easy payouts. The Boomers won’t be off the hook, but it will officially be up to a new generation to decide how to navigate the world we’ve all inherited. Bring it on.

How Baby Boomers Can Find Themselves Again After Life-Altering Events

Do you feel like you need to find yourself again? Baby boomers can go through a lot of major life changes that throw your sense of self. Retirement, caregiving, empty nest syndrome, divorce, or the loss of a loved one can change your life forever.

After my mother's death, I got a letter from the hospice bereavement coordinator that helped my family care for my mother in her final days. They acknowledged that family members who have spent most of their time caring for their loved ones for months or perhaps years often ask themselves after their death, "Where do I go?" Egypt "What do I do?"

That's exactly how I felt after my Mom died. I was the primary caregiver for my Mom who had Lewy Body dementia, a combination of Alzheimer's and Parkinson's that rendered her helpless both physically and mentally. Being a caregiver was the hardest job I've ever had – by far. When she passed away, I assumed that while I would grieve for my Mom, I would also feel a sense of relief that my job was finished and my life could get back to normal.

Instead, I felt lethargic, depressed, and yes, lost after she died. My life, my thoughts, and my feelings had revolved around the care of my mother. I discovered that when your roles change drastically, you lose a sense of who you are. Your self-image is shattered.

This uncomfortable feeling can happen whenever you go through a major change in your life. Perhaps you've recently retired or become an empty nester. After dreaming of all the things you'd do when you had more time after child returning and working 9 to 5, you feel lost instead.

Remember, although you may no longer be a caregiver, part of a couple, an employee, or full-time parent, you are still 100 percent you. You just need to find that person again.



If you have suffered a loss, be kind and patient with yourself. Acknowledge your feelings instead of sweeping them under a rug. Everyone is different. Emotions can range from anger, loss, guilt, sadness, lethargy, regret, confusion, and depression.

Whether you lost a loved one, a stranger in divorce, or a job, you may have lost your lifestyle and identity as well. It's okay to mourn that loss.

However, be careful not to isolate yourself during this process. You'll need a network of support. Healing may mean lots of heartfelt prayer, talking out your feelings with a support loved one, and / or focusing your energy in a healthy activity you enjoy.


Avoid getting stuck in all the "I should have …" or "I wish …" feelings that often comes with grieving but can interfere with your recovery. Do not allow sorrow, stress, resentment, or bitterness to become a way of life. Take all that negative self talk out of your head like, "I've lost everything" or "My life is over." The fact of the matter is that your life is not over; it's just a new beginning for you.

The goal is not to wallow forever in negative feelings but to move on, be there for the people who need you, have a meaningful and productive life, and enjoy living once again. Be grateful for what IS working in your life right now. Live in the present and focus on the positive. Learn from your experiences and prepare yourself for the next exciting chapter of your life.


It's easy to get lost in caring for your family and children or elderly parents or nurturing a career. You may have given up a lot of things that you enjoyed. Make time to get to know yourself again.

"To move your life forward, it has to start by focusing on yourself," wrote Mark Branschick, MD in an article, Seven Ways to Thrive After Divorce, for Psychology Today. "Use this precious opportunity to rediscover who you are." Think of this time in your life as an adventure to explore the real you. "

You can lose sight of your unique gifts if you're focusing on what you do not like about yourself or your life. Think about your qualities and skills and how you can best use them. What really makes you happy? What really matters to you? What do you feel is your true purpose in life? What hobbies and activities did you enjoy before becoming a caregiver, a married couple, or a parent? What is it that will make you excited to get out of bed every day? Make a list of what you can do to reach your goals.

Rediscover what welcomed you fulfillment, satisfaction, fun, and joy as a way of rebuilding yourself and your life.


My life changed overnight and that can be disconcerting. In my case, we had recently moved into a new home we had built to be closer to my Mom (who unfortunately died the week before it was finished). My husband and I went from being empty nesters to a house full of grown children and grandchildren. Plus, I had to find new clients as a freelance writer and begin working again. It was a tumultuous year in other ways as well. My mother-in-law lost her fight against ovarian cancer and my son began going through a nasty divorce and custody battle.

Let's get real, between all these events and changes in my life, I was shaken. I felt fragile and scared depression for the first time in my life.

It's been a journey, but I am beginning to recover and heal. In the process, I'm learning to embrace all the new changes in my life. My new job writing magazine articles does require meeting strict deadlines, but the subjects are fun and it's exciting work. We are a multi-generational family living together, but I've come to enjoy having the cocoon of family love around me during this difficult time. My oldest son is going through many of the same emotions as I am as he finds his way after divorce and we've connected on a whole new level. When our three grandchildren are with us, they bring us joy and keep us young.

So, do not be afraid of change. Get out of your comfort zone and discover a new side of yourself. Maybe that means a new career, trying a new sport, traveling to a new place, changing your hair, or taking classes. Shake things up a little.


You will go through several stages before this step can happen. However, the time comes when you make a choice. You can move on and discover possibilities that a life change presents you or get stuck in negative emotions.

Find a way to put one foot in front of the other. If you can move forward, you'll probably see the light at the end of the tunnel. I know this from experience.

In time, you'll reconnect with old friends or make new friends, go to work, back to school, or volunteer, rediscover what once you thought you joy, enjoy new adventures, and find your way. You'll look at the changes in your life in a positive way, feel more confident and in control, and become more productive and optimistic about your future.

The time will come when you will find yourself again, embrace your new role in life, and feel like your new shoes are a good fit. You will breathe a sigh of relief. Life will never be perfect but eventually you will not have to struggle so hard to "make your life work" again. It just will.

How to best educate baby boomer workers on retirement

Seventy-four million: That’s the estimated number of baby boomers, according to the U.S. Census Bureau. And 66% of baby boomers are working past traditional retirement ages for a variety of reasons. Some feel they can’t afford to retire, particularly with the looming high costs of healthcare; others may choose to work longer to keep their brains active or because they fear the adjustment to a less structured lifestyle.

Older workers approaching full retirement age (which varies, depending on when they were born) where they can begin receiving 100% of Social Security, face some daunting decisions about Medicare, Social Security and retirement plans such as health savings accounts and 401(k)s — unchartered territory until this point in their lives. There are specific rules about contributions and withdrawals in retirement, and employers should help with the education process. Here are three ways to do so.

Break down the HSA rules from a retiree perspective. If you offer HSAs to your employees, it’s important they understand how HSAs work with Medicare: The IRS dictates that a person can’t contribute to an HSA if they’re enrolled in part of Medicare (Part A, Part D, etc.) However, they can draw on funds already in the account to pay for qualified medical expenses and premiums for Medicare Parts B, C and D (but generally not Medicare supplement plans or Medigap insurance premiums).

Importantly, your employees may be penalized for delaying Medicare, depending on the number of employees you have and whether you have group health insurance. These requirements may not be well known by your employees and should be communicated clearly.

Of course, because Medicare, Social Security and any retirement plans involve several layers of government rules and financial regulations, there are some tricky issues your employees need to know about. One is retirement “back pay.”

When employees sign up for Social Security at least six months beyond the full retirement age, they’ll receive six months of retirement benefit back pay. This is problematic if your employees contributed to their HSAs over the previous six months — they are liable for tax penalties on HSAs. Create an education strategy that includes this information for employees looking to retire, so that they can stop contributing to their HSA six months before retirement and avoid costly mistakes.

Help employees understand how all their benefits work together. Your employees have contributed their knowledge and skills to you; it’s important to help them understand their options as they work toward retirement. For those just a few years out from retirement, your education plan may include helping employees understand eligibility requirements for both Social Security and Medicare, as well as any penalties that might arise from applying late to Medicare.

See also: With little saved, employers and aging employees share same fear: Can retirement happen?

As your employees age, they are also eligible to contribute “catch-up” funds to HSAs, IRAs and 401(k)s in preparation for retirement. Your 401(k) partners and financial wellness resources can help employees assess their financial situations and prepare for retirement. For example, it’s a good idea to encourage employees who may have multiple 401(k) plans to consolidate them into one — this will make it easier to manage when they retire. They may ultimately roll these into an IRA to access additional investment options.

Maintain a focus on wellness. If you have a wellness program in place, take measures to boost participation and steer employees, especially older participants, toward healthy habits to help them live well and be productive leading up to retirement.

Wellness may extend outside of physical, emotional and mental wellness to professional development. Help them improve their retirement outlook by keeping job skills up to date so they are better prepared if they need to take on other employment to supplement their retirement.

For anyone nearing retirement age it’s a good idea to become acquainted with “Medicare and You,” the government’s official Medicare handbook. While each employee’s situation will differ, there’s no doubt that planning and education are key to a successful retirement strategy and, as an employer, you can support these efforts.

Loretta Metzger

Loretta Metzger

Loretta Metzger is a benefits consultant at Corporate Synergies.