Retirement Savings Catch-Up: 4 Moves to Make

By: Nanette Johnson

Shortly after becoming a mother, I left the workforce and stayed home to raise my children. It was never meant to be a seventeen-year leave, but that’s what it turned into. It was a sacrifice to my career and our family income, but I felt it was the best option, based on our family’s circumstances.

Retirement savings and financial planning weren’t our top priorities when we had young children, as the immediate demands of parenthood took precedence. But eventually, our babies grew into teenagers with new cars and college tuition bills. So when my youngest child was in high school, I returned to the workforce. Staring down retirement felt overwhelming after being unable to prioritize it for seventeen years. But I committed myself to learning and catching up.

My experience taught me four essential moves that made all the difference in my retirement planning and savings journey.

1. It doesn’t matter where you’ve been — you just need to know where you are and where you’re going. I know, it’s like not wanting to step on the scale or look at your bank statement after a major shopping trip. But it has to be done. It turned out my husband had a 401(k) from every job he’d ever worked, and I had an old one from my first job. We moved all of his accounts into one rollover IRA, and surprisingly, once we consolidated all the various accounts, it didn’t look as bad as we thought. Just that first step brought focus and commitment.

2. Talk to a professional — someone who can look at your current state unemotionally. A professional can help guide conversations about your goals, legacy, big dreams, and minimum baselines/non-negotiables during retirement. There are also online planning tools that will give you feedback (without any judgment or shame) on what your retirement income can look like. We used one, and yes, I was anxious as all the information was typed in, but in the end, we were not that far off from our target.

3. If you were like me and left a career — return! I returned to accounting because debits and credits don’t change, so my skills were still relevant. It took me a year to find the right part-time job to re-enter the workforce, which eventually became full-time when the timing was right for our family. Once you return, contribute as much as possible to your 401(k). It’s okay if contributions aren’t tax deductible. It’s your money, and you are paying yourself. You could pay down your mortgage faster with that second income too. Your home is a huge retirement asset!

4. Take a second look at whole life insurance — you may not need it for income replacement, but you can leave a legacy for your family. Our retirement savings will support my husband and me, but we also want to have enough left to create a legacy for our grandchildren. As our family grew, there was a shift in our “why,” and it was a great time to re-evaluate our life insurance needs.

Retirement is personal. I think that’s what tripped me up for so many years. There are so many details that I found it hard to be motivated to grow my retirement savings when I didn’t have a firm plan or goal. While it’s great to look to your loved ones for inspiration, it’s important to remember this is your life, and retirement looks different for everyone. Once we started this process, our vision began to focus, and we could see all the opportunities ahead.

We started living—while continuing to work towards our plan. We are enjoying our grandchildren, cycling, traveling, and working, all while contributing to our retirement goals. We continue to have some tough conversations about where our retirement will be, but for now, we are motivated by the process. And truthfully, I love this stage of life.

What does retirement look like to you? Is it a second career? A part-time retirement? These discussions will help you focus on your own dreams and goals, either as a couple or personally. Your children don’t retire with you. It’s up to you to decide, but there is no better time to get the conversation started than now.