Millions of Americans grapple with the question of where to retire every year. And it’s no wonder many struggle with the decision, considering how many factors are in play.
Category: Retirement
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Fidelity says 401(k) balances are falling — but Americans don’t seem to be flinching
As markets whipsawed through a turbulent first quarter, American workers didn’t blink: They kept saving for retirement — even while watching their 401(k) balances get smaller.
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Triple the home, half the price: A boomer cashed out of California for a better deal in Oregon
Jeremy Smith’s home in West Linn, Oregon, was half the price and almost triple the square footage of his house in San Ramon, California. Courtesy of Jeremy Smith
- Jeremy Smith sold his 2 California houses in 2021 when demand for homes surged and mortgage rates fell.
- Smith and his wife moved to Oregon, where they found a much larger home for half the price.
- While Smith misses California, he’s surrounded by ex-Californians in his Portland suburb.
As a businessman, Jeremy Smith never liked the term “downsizing.” When a CEO uses it, it doesn’t tend to be good news.
When it came to retirement, though, Smith and his wife were excited to eventually trade their house in San Ramon, California, 35 miles east of San Francisco, for a smaller, more affordable home to grow old in.
But the couple ultimately opted to upsize their living space — if not their mortgage payments. They ended up leaving California behind and buying a much larger — and much cheaper — place in Oregon.
Smith, who founded a food brokerage company called LaunchPad, wasn’t quite ready to retire in 2021. But watching home values in California skyrocket in 2021, he decided it was time to sell. First, he listed his South Lake Tahoe vacation home, which he’d bought just six years prior for $540,000. The house sold the same day in April 2021 for $1.2 million, all cash and over the asking price.
The sale convinced him to put their primary East Bay house on the market, too. That home, which Smith bought in 2010 for $600,000, sold for $1.5 million.
At first, the couple considered retiring to someplace in Southern California, like Malibu or Manhattan Beach. But their home sales suggested to him they needed to buy their next place outside of California’s hyper-competitive, extremely expensive market.
“I felt like it’s one of those things where you throw a quarter in a slot in Vegas, and it pays $1 million, and you don’t stay at the casino. You get that money, you get the hell out, and you go home so you’re not tempted to spend it,” Smith said.
Smith’s wife, a native Oregonian, pushed for Portland. So they decided on the small city of West Linn, a quiet suburb just south of the city.
When they realized how much more affordable Oregon was, they opted for a home almost three times the square footage of their San Ramon house, but at half the price. They bought the place for $750,000 in June 2021, while mortgage rates were still low.
“I didn’t realize the tremendous cost of living savings that we would get by moving to Portland,” Smith said. “We wound up getting more for a lot, lot less, which allowed us to invest back into the stock market.”
Jeremy Smith and his wife, Mary Jo, sold their primary home in San Ramon, California, for $1.5 million at the peak of the market in 2021. Courtesy of Jeremy Smith
A community of Californians
Despite loving the Portland area in many ways, Smith misses California. He yearns for warmer weather, sunshine, ocean views, and living closer to his three children and grandchildren. He says he visits about four times a year to see his kids and doctors.
“I miss the hell out of California,” he said. “Yes, it’s expensive, but it’s a magical place.”
Still, he loves being surrounded by Oregon’s many rivers and Lake Oswego, where his wife kayaks regularly with her friends. And the food is excellent in Portland, he added.
And while Smith may have left California, he’s still surrounded by Californians. He estimates that 12 of the 14 homes in his gated neighborhood are owned by people who moved to Oregon from California. Many came to Portland for a more affordable retirement, and some still have homes in the Golden State.
These days, he spends his time walking his two French bulldogs, eating out with friends, and chatting with neighbors. “It’s nice to be able to joke around and talk about all the fun stuff in California,” he said.
But he’s still adjusting to some of Oregon’s quirks.
“I’ve never seen so many damn beards in my life,” he joked. “And you’ve got to get used to flannel shirts.”
Do you have a story to share about home selling, buying, or moving? Contact this reporter at erelman@businessinsider.com.
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Retirement and investing under Trump 2.0: Financial advisors say ‘don’t panic’
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- Older Americans are facing retirement uncertainty due to market dips and Trump policy changes.
- Financial advisors urge against drastic investment changes, despite recession fears.
- Diversifying income sources and delaying taking Social Security can help stabilize retirement plans.
With dips in the stock market, planned staff cuts to the Social Security Administration, and rapidly changing economic policy, nearly a dozen older Americans told Business Insider they aren’t sure how to navigate retirement under Trump 2.0 — so we asked financial advisors.
It turns out that they have also been fielding an uptick in queries about how this political moment will impact clients’ finances.
Some retirees are tempted to make drastic changes to their investments, while others feel anxious about how their Social Security benefits may fare. This comes as the White House makes sweeping cuts to the federal workforce, the Department of Government Efficiency slashes budgets for government programs, and Wall Street braces for a potential recession.
The biggest advice for older Americans right now from financial advisors: don’t panic. The news cycle since President Donald Trump’s inauguration has moved quickly, and most advisors caution older adults against making any major changes to their retirement or savings accounts. Advisors told BI that building emergency funds and cutting back on spending are smarter ways to approach economic uncertainty.
“While it’s difficult not to react when stocks are falling, this has often been the best course of action, or you risk locking in potential losses and missing out on any market recoveries,” said Rita Assaf, vice president of retirement offerings at Fidelity Investment. “If you are saving for retirement, continue to stick to your plan. If you haven’t created a plan, you should.”
Here are the three top tips on retirement planning in the current economic climate from financial advisors, economists, and wealth managers.
Avoid drastic investment decisions
The S&P 500, Dow Jones Industrial Average, and Nasdaq have fallen recently, sparking nervousness among older Americans who have invested their retirement savings. A potential recession could also impact the value of some retirees’ assets, like homes.
“Putting the possibility of a recession into perspective can be hard to do,” said John Canally, chief portfolio strategist at TIAA, Wealth Management. “Emotion is a big part of investing, for better or worse, and investors often see short-term volatility as extremely disruptive.”
However, Gordon Whittaker, a Merrill wealth management advisor, told BI there is nothing about this period in the market that is different from other times of elevated volatility. If Americans have a smart retirement portfolio with adequate risk allocations, he said they shouldn’t make any major money changes.
Financial advisors told BI that it’s better to wait and see before making any immediate changes to 401(k) or Roth IRA strategies. Additionally, don’t make any changes now in an effort to “get ahead of the economy,” said Greg McBride, chief financial analyst at Bankrate. He added that investors can miss out on gains more than avoiding losses when they try to outguess the market.
Market conditions will likely change again soon, and Canally said it is important to “stay anchored” to long-term wealth and savings goals.
Older Americans who have invested in the market should ensure their stock portfolio is diverse, said Christopher Scibilia, a private client advisor at J.P. Morgan Wealth Management. People should invest in various stock options, ideally in stable industries without much risk. Scibilia added that retirees should also plan to withdraw their investments when the market is higher to avoid losses.
Evaluate your budget and pay down debt
Regardless of age, economists and financial advisors told BI it is a good time for Americans to reevaluate their spending.
The job market could slow down, and the price of everyday items could tick up due to tariffs and market volatility, especially if there is a recession. This is a good time to examine household budgets and see what can be trimmed or cut if income changes, McBride said. He added that people should prioritize paying down debt, building emergency funds, and focusing on liquid cash savings.
Scibilia said older Americans, especially, should have cash on hand in case of unexpected expenses, like a medical diagnosis. He said building an emergency fund alongside a traditional retirement account should be a top consideration for Americans who are retired or are looking to retire soon.
Don’t count on Social Security alone to pay your bills
BI previously heard from older Americans who are either unable to retire or must return to work after retirement due to financial constraints. Many said that Social Security isn’t enough to afford essentials, and millions of retirees don’t have adequate savings.
The Social Security fund is unlikely to be immediately affected by any of Trump’s planned policies, though Trump has suggested cutting some government healthcare coverage and resources for Social Security beneficiaries.
Financial advisors and economists told BI that having multiple income streams can help protect people from market volatility or any changes in government benefits.
Assaf and Scibilia said that older Americans should consider waiting to collect Social Security. Delaying their claim until age 70 could increase people’s benefits by 8%, which could be especially helpful for Americans worried about the Social Security fund dwindling in the 2030s, they said.
“Having multiple income sources, like Social Security, pensions, or part-time work, can also provide stability,” Scibilia said.
Julia Pollak, chief economist at ZipRecruiter, also told BI that people with emergency funds, investment portfolios, and updated skills in their industry recover fastest from job losses. Scibilia added that pursuing part-time work and increasing health insurance coverage can help retirees weather unexpected expenses.
Do you have a story to tell about retirement plans and how you’re navigating finances under Trump 2.0? Reach out to these reporters at allisonkelly@businessinsider.com and nsheidlower@businessinsider.com
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My doctor said my 80-hour-a-week job had been slowly killing me. Retiring early gave me my life back.
Kelly Benthall decided to retire early to improve her health. Kelly Benthall
- Kelly Benthall saw work culture improve over her 30-year career, but the damage had already been done.
- Last year, she decided to retire early in order to improve her mental, physical, and emotional health.
- At her first post-retirement checkup, her doctor noted improvement.
My plan had always been to retire at 65 — grind it out, climb the ladder, and finally enjoy the freedom. But plans change, especially when your body starts flashing warnings you can’t ignore.
Last year, at 53, I retired early with my husband — not because we had meticulously planned every detail, but because the cost of staying in the rat race — mentally, physically, and emotionally — had become too high. Work had always been a source of pride, but it was also a source of stress and, at times, serious health consequences.
For more than 30 years, I helped companies ranging from startups to giants such as Shell and Chevron navigate strategic change. I had spent those decades taking on more responsibility than was reasonable, absorbing the pressure, and expecting little in return. Over time, I internalized stress as a normal part of success — until my body forced me to stop.
The corporate fast lane and its toll
The workplace has changed a lot since the ’90s and early 2000s, particularly in male-dominated industries like oil and gas. Back then, I was a minority as a woman, and those who made it to the top endured relentless pressure. Some became champions for equality. Others expected fellow women to tough it out, believing suffering was a rite of passage.
Some female leaders respected my work, but others saw it as a threat.
During an orientation at one of my first jobs, I mentioned my experience in speechwriting to a CEO. He asked me to write his sales conference talks, but my female boss told him I wasn’t interested and offered to do it herself. I later reached back out to the CEO to clarify, and we ended up partnering for years.
And then there were #MeToo moments I can’t believe I tolerated. One boss thought it was appropriate to share his appreciation for Playboy centerfolds during meetings.
The culture shifted over time as companies implemented stronger policies and accountability measures. By the time I reached my final years in corporate life, the culture had improved. But the damage had already been done.
Years of working in high-alert mode left me conditioned to expect the worst, even in safer environments.
The moment my body fought back
Despite disappointments, I kept my foot on the gas. I worked harder than ever, sometimes logging 90-hour weeks, believing that if I just worked smart enough and fast enough, I could outpace the stress.
I was wrong.
One day, I collapsed at work. My blood pressure spiked to 220/180, and I ended up in an ambulance. The EMTs gave me nitroglycerin, but nothing happened. I heard one of them say, “Uh-oh,” before telling the driver to move faster.
That should have been my wake-up call. Instead, I doubled down — cycling through medications in a desperate attempt to keep going.
It wasn’t sustainable.
A change coach who couldn’t change
I had spent my career coaching others to accept change.
The advice I’d given countless others seemed easy when it was someone else’s problem. “Do as I say, not as I do,” I thought. Yet, as I struggled with burnout and my health deteriorated, I realized I wasn’t taking my own lessons to heart. I had built a career around helping people, but I had been afraid to make the same leap myself.
It wasn’t until I spoke with a coach — a free consultation, something I almost canceled because I “didn’t have time” — that I saw my life from a different perspective.
She asked me one simple question: “When was the last time you did something that scared you?”
The question caught me off guard. I had spent so many years operating in a world of controlled risks, where I calculated every move and mitigated every possible failure. But fear? The kind that comes from stepping into the unknown, from daring to disrupt the status quo? It had been a long time since I’d felt that.
That moment unlocked something in me. I remembered who I was — someone who took chances. I had once thrived on new challenges, stepping into high-stakes projects where failure wasn’t an option and leading teams through uncertainty. Yet, I had spent years trapped in a cycle of stress and obligation, mistaking endurance for achievement.
“Sometimes you have to break down to break through,” the voice in my head whispered. That was the moment I decided to retire.
Retirement cured me
When I finally stepped away from my career, I didn’t fully grasp the toll it had taken on my body. But retirement didn’t just heal me — it gave me a new way of living. My husband and I embraced slow travel, trading deadlines and commutes for long walks in new cities, quiet mornings with coffee, and the freedom to explore at our own pace.
It wasn’t until my first post-retirement checkup that I saw the difference. My blood pressure had dropped, and my stress markers were lower.
My doctor looked at my stats, then back at me, and said: “Your job was trying to kill you.”
Escaping the hustle trap
Retirement didn’t just save my health. It felt like finally pulling off the highway, realizing I’d been speeding toward a crash. It rewired my brain. What I had once called “drive” was really just a never-ending sprint toward exhaustion.
While work environments have improved in some ways, the effects of years spent enduring stress don’t just disappear overnight. People like me, who became accustomed to overwork and constant pressure, struggle to recognize what a healthy pace actually looks like.
If you feel trapped in a high-stress career, ask yourself: When was the last time you did something that scared you? What are you really working for? At what point will you have enough? How long can your body sustain this stress? And most importantly, what’s stopping you from making a change?
I wish I had asked myself these questions sooner. But the good news is that not everyone has to wait until their body forces them to stop.
Do you have a story to share about retirement? Contact the editor at akarplus@businessinsider.com.
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Meet the baby-boomer homeowners defying their generation’s struggle to downsize without losing money
Some baby boomers have been lucky enough to sell their large homes in a booming market and downsize. Irfan Khan/Getty Images
- Three baby boomer homeowners told BI how they managed to downsize in retirement.
- These older homeowners benefited from soaring home values and low mortgage rates.
- They managed to find affordable homes with easy access to family and community.
Getting rid of a life’s worth of stuff and shrinking your living quarters isn’t most people’s idea of a good time. But Holly Gates had fun saying goodbye to half of her things.
“I’m probably more of a minimalist than I ever wanted to admit to,” the 75-year-old retiree told BI, “so downsizing was a lovely challenge for me.”
Baby boomers have been getting some of the blame for the shortage of larger homes on the market. Many of them are resistant to downsizing — opting to age in place in homes that have exploded in value. And some who want to downsize are having a hard time finding accessible and affordable retirement housing.
But others have gotten lucky, managing to cash in on the booming housing market and trade in for a home that better suits their needs.
Two years ago, Gates and her husband sold their Oceanside, California, home and moved 40 miles south, where they bought a house for less than half the price and square footage. What convinced them to move wasn’t just a desire to downsize. Not ready for assisted living, but eager for community, the couple wanted to live in a walkable, close-knit place full of active people their age.
That’s just what they found at Laguna Woods, a 55-plus community of nearly 19,000 residents just south of Irvine. They have more than 200 clubs, including for music, astronomy, and Badminton, seven clubhouses for golf and bridge players to gather, several pools to pick from, and a bus system that ferries residents to medical appointments and shops. Gates recently celebrated her 75th birthday with 30 neighbors in a shared event space.
“We’re all in this together, and we watch out for each other,” she said. “The enormity of the pluses outweighs the small things, like an extra bedroom.”
The couple sold their Oceanside home for $1.07 million and bought their current home for $525,000, all cash, according to documents viewed by BI. They have to pay a $1,200 monthly homeowners association fee, which covers their property taxes, water bill, and home maintenance, including recent plumbing repairs and a new roof, Gates said. The co-op model removes much of the burden and liability of homeownership.
Holly Gates’ friends at her birthday party in a shared space at their 55+ community. Courtesy of Holly Gates
Moving near family
Leaving Orange County, California, wasn’t part of Bruce Levin’s plan. But when he got sick and retired from his 20-year career as a chef for Amtrak, Levin realized he wasn’t up to the task of maintaining his 1950s bungalow with a pool in Buena Park.
It was 2021 and the value of his home of about 35 years had ballooned. So he sold it for $730,000 without making any repairs and moved 200 miles north to Central California to live near his daughter and two grandchildren. Mortgage rates were still low, and Levin, a widower, managed to buy an accessible, single-story home for $335,000 in the small city of Exeter. These days, he rides his electric golf cart to a local senior community for lunch and sees his girlfriend who lives nearby.
Levin is healthier now and misses his old neighborhood and taking advantage of his Amtrak pass to hop trains around the state. But he doesn’t think he can live his old, fully independent life anymore. “I’m not like I was, but I’m okay,” he said. “I’m not pole vaulting, I’m not running a marathon. I walk with a cane.”
He added, “LA has become a very young town.”
Like Levin, Hedy Vahabzadeh, 72, and her husband moved to live near their daughters and grandchildren in retirement. The couple sold their home in Houston in 2017 and moved to the Florida panhandle. The couple managed to find an 11-acre piece of land in Freeport and built a new home. “The property was a steal. It was covered in trees. There was nothing around it,” Vahabzadeh said. But her husband “had a vision.”
Hedy Vahabzadeh and her husband designed their home in Freeport, Florida, to be comfortable as they age. Courtesy of Hedy Vahabzadeh
Their Freeport home is one story with just a few steps on the front and back porches. “We built it to be comfortable in our old age,” she said.
These days, the area is a sought-after vacation and retirement destination, and Vahabzadeh feels they got in just before demand for homes there exploded. “It’s a comfortable life,” she said. “We’re not trying to keep up with the Joneses kind of people. And we’ve never been that. So we’re just enjoying ourselves.”
Gates, Vahabzadeh, and Levin all benefited from lucky timing. They bought real estate before the demand for — and prices of — homes skyrocketed amid the Covid pandemic. Levin and Gates managed to cash in on the booming market at a moment in their lives when less home was more.
“I’m thanking God that we did this stuff before all this inflation,” Vahabzadeh said. “We were just fortunate.”
Do you have a housing story to share? Contact this reporter via email at erelman@businessinsider.com or Signal at elizarelman.57. Use a personal email address and a nonwork device; here’s our guide to sharing information securely.
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I’m on track to retire wealthy, but there are still 4 money lessons I wish I’d learned before 40
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The author, Holly Johnson. Holly Johnson
- My husband and I are on track to retire wealthy, but we weren’t always smart with our money.
- I wish we’d started investing sooner, and learned earlier that we could make more working for ourselves.
- I’ve also learned that it’s possible to make some bad decisions and still do fine.
When my husband and I started getting serious about our finances in our late 20s, we naturally thought we had everything figured out. We believed we would live intensely frugal lives and work toward paying off every cent of debt we had, and that’s exactly what we did. However, we never thought much about what happens next, or how our attitudes about money might dramatically change as we age.
The reality is, we became self-employed somewhere along the way and started earning more money. And now that I’m 43, I can say with certainty that we’re financially independent and on track to retire wealthy when our kids leave the house in seven years.
That said, there are some lessons I learned in my 30s and early 40s that I wish had clicked earlier, and for more reasons than one. Here’s an overview of what I wish I’d known about money when I was younger, and why.
1. Earning more money changes everything
The first lesson I wish I had learned earlier is just how impactful it can be to increase your earnings, especially since I only earned around $40,000 at my old 9-to-5 job.
No matter what anyone says to the contrary, there’s only so much you can save when you’re on a fixed income. You can cut your cable bill and start using a monthly meal plan. From there, other steps like buying a smaller home and shopping around for car insurance and homeowners insurance can only save so much.
Even worse, working in a traditional 9-to-5 job also means getting whatever raise you’re assigned to receive each year, if you get one at all. At my old job from more than a decade ago, I was pretty much limited to a 3% raise each year, no matter what.
On the flip side, finding a way to earn more money can solve myriad problems while helping you invest for the future on a much faster timeline. If I could go back and change anything in this realm, I would have left my traditional job to become self-employed as early as possible instead of spending years wondering if I would be making the right move.
For those who aren’t interested in self-employment, finding other ways to earn more can be a huge deal. This could mean taking on overtime at work, picking up a side hustle, or switching jobs to secure higher pay.
2. The power of compound interest is astonishing
This lesson ties into the first one, but I really do wish we had begun investing for retirement at a much younger age. We actually opened 401(k) plans for the first time in our late 20s, and we only contributed a nominal percentage of our incomes at the time. Now that I know and understand the magic of compound interest, I wish we had contributed much more than we did.
The fact is, investing as regularly and early as possible is the best way to benefit from compound interest so you can retire when you want, and on your own terms. After all, investing early lets you begin building up a nest egg that increases in value over time, and compound interest eventually lets you grow wealth off of wealth you already earned on your investments in the past.
Just as an example, consider this financial scenario:
Imagine you invest $1,500 a month for 30 years starting at age 30, which means you are making $540,000 in contributions over that time. If you earned an average yield of 7%, you would end the 30-year period at age 60 with just over $1.7 million.
Now imagine you invest $2,250 for 20 years starting at age 40, which means you are making the same $540,000 in investments over a shorter timeline. With the same 7% yield, you would end the 20 years at age 60 with just over $1.106 million instead.
3. You can make a lot of bad decisions and still do fine
While my husband and I have made some really good financial decisions, we have made some pretty tragic ones, too. For example, we delayed investing for retirement as I already mentioned, and we overspent on remodeling our second home and sold it for a loss.
We also spent a ton of money trading in our cars for new ones during the first few years of our marriage, and we initially had our investments with a high-cost brokerage firm that charged pricey and unnecessary fees.
As I’ve gotten older, however, I have realized you can make a lot of big mistakes and still do pretty well. You just have to have some good decisions mixed into the bad, and you have to focus on “getting ahead” slowly over time, even if you feel like you’re taking three steps forward and two steps back each year.
Ultimately, my husband and I made lots of great decisions, including venturing into self-employment, investing a ton during our highest earning years, and avoiding debt for more than a decade and counting. While the mistakes from our past have held us back to a certain extent, the good decisions we have made more than made up for the difference.
4. Mental energy is expensive
In the last few years especially, I have learned that my mental energy must be preserved for the things in life that actually matter. This often means I am more than willing to pay for conveniences that help me stay sane, whether that means having my house cleaned on a regular basis or ordering groceries online so I can skip the store.
This lesson took me a long time to learn, especially since I used to be so frugal. There were years in my life where I would spend hours trying to save a few bucks, whether through cutting coupons or driving from store to store to shop sales.
Now that I’m older, I would rather spend my free time working or relaxing with my kids. It took a decade, but I now know for sure that my time is better spent investing in my family or my work. Anything else that can be outsourced is, and I rarely worry about the cost.
Ultimately, growing old is teaching me that money matters a lot, but not for the reasons I once thought. These days, I use money to buy freedom and time — the two things in life that are truly priceless.
This article was originally published in November 2022.
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