No one ever wants to look back in regret. But for many retirees, this is the reality.
Not to be pessimistic at this new start of the year, but it’s useful to listen to the regrets of retirees — especially if you’re closing in on retirement yourself.
“Despite improvements in savings habits and financial engagement, many retirees regret some of the life decisions they made as they prepare for retirement,” Suzanne Ricklin, vice president of retirement solutions at Nationwide Financial, told Yahoo Finance. Told to “More than 8 in 10 workers over 45 regret not saving for retirement More seriously when they were little.”
Here are the five biggest regrets of retirees:
According to one, fewer than 1 in 4 retirees are very confident that they will be able to maintain a comfortable lifestyle during their retirement. New report By the nonprofit Transamerica Center for Retirement Studies.
In this survey, excluding home equity, the estimated median household savings among retirees is only $71,000. The estimated median home equity among retirees is $114,000. But 1 in 4 retirees have no home equity.
According to researchers, more than two-thirds of retirees wish they had saved more and more consistently — and half wish they hadn’t waited so long “to worry about saving and investing for retirement.” ,” according to the researchers.
“Many of today’s retirees lack the awareness, familiarity and access to resources needed to prepare themselves for a successful retirement,” Kathryn Collinson, CEO and President of the Transamerica Institute, told Yahoo Finance.
“Their careers began 40 or 50 or more years ago — long before the advent of 401(k)s and the social imperative for people to self-fund a large portion of their retirement income. ,” he said.
For many women, menopause starts late. research Corbridge Financial found that more than 6 in 10 retired women wish they had started saving for retirement earlier – with only a quarter starting to save and invest between the ages of 18 and 29. . Worse, 4 in 10 retired women say they don’t start prioritizing their finances and retirement planning until age 41 or later, and 20% say they still do. have not started
what?!
“All of this points to the importance of saving early in your working years,” Terry Fiedler, Corbridge Financial president of retirement services, told Yahoo Finance. “This came out loud and clear in our survey. Knowing what they know now, this was the No. 1 piece of advice they gave to retired women in their younger years about retirement planning.
Nearly 3 in 10 retirees start receiving benefits at age 62, the earliest possible, according to a new report. (Getty Creative) ·Douglas Sacha via Getty Images
One of the biggest blunders people make when it comes to Social Security is claiming too little benefit too early. You can improve your chances of not outliving your savings by delaying taking Social Security benefits, which will significantly increase your monthly check for decades.
But many people don’t – or can’t – wait. According to a Transamerica report, the average age at which retirees begin receiving benefits is 63. About 3 in 10 retirees start receiving benefits at age 62, the earliest age, resulting in very little benefit. Only a slim fraction, 4%, of retirees waited until age 70.
Here’s how the math works. If you have flexibility Delay benefitThe increase you get by waiting is substantial. You earn delayed retirement credits by pushing your benefits back to your full retirement age, or FRA — either 66 or 67 — until age 70. They add about 8% per year to your benefit each year until you reach 70, when credits stop accumulating.
While there are obviously good personal reasons for claiming early, such as poor health or financial constraints, psychological distress often pushes retirees to get their checks rolling sooner rather than later.
According to Cornell University marketing professor Suzanne Shu, perhaps the biggest factor is psychological ownership of one’s Social Security benefits.
According to a Transamerica report, nearly half of retirees said debt was a stumbling block that prevented them from saving for retirement.
And once they retire, nearly 7 in 10 report outstanding credit card debt, per a survey From the Employee Benefits Research Institute (EBRI). This is up from 4 in 10 four years ago.
And one-third said they will spend more than they can afford in 2024, nearly double the number of respondents from 2020.
About 6 in 10 retirees retire earlier than planned, per Transamerica (Getty Creative) ·WC.GI via Getty Images
Sometimes the decision to retire is regretted. About a third of retirees regret not working longer, according to Olivia Mitchell, co-author of a paper published in . National Bureau of Economic Research.
The financial upside of working past traditional retirement age is obvious: more years of earning and saving, not having to dip into retirement savings so those funds can be invested and grown, and pushing back on claiming Social Security. have the capacity of
Sometimes the choice, however, is made for you. More than half of those surveyed by EBRI retired earlier than expected due to reasons beyond their control, such as health problems or disability, or changes in their company, such as downsizing, closing, or restructuring.
About 6 in 10 retirees, per Transamerica, retire sooner than planned. Only 1 in 5 retired early because they were financially able.
Retirees often regret not preparing emotionally and making a plan for the transition to retirement and what to do next, Preston Cherry, a certified financial planner, told Yahoo Finance.
“These are answers to questions like: What am I going to do next? How am I going to do this? How will I involve myself in hobbies and know myself?” he said.
“They regret that it took them so long to allow themselves to retire, and then to unplug from an identity that they can use — whether it’s their business or a corporate job. “
In general, retirees are happy, have close relationships with family and friends, are enjoying life, have a positive outlook on aging, have a strong sense of purpose, and have an active social life. are
In fact, more than 4 in 10 retirees have experienced improvements in their enjoyment of life and well-being since they left the workforce, Transamerica data found. In addition, many are actually spending more time with family and friends and pursuing hobbies than they ever hoped would be possible.
According to research by Corbridge, more than half of retired women rate their financial health as good or very good, compared to only 38% of retirees.
“One thing that stands out in the data is the fact that retired women are more likely to describe their financial health positively than they were in their working years,” Fielder said. “It is surprising that many women who have retired from the workforce feel more secure about their finances than women who are still earning a salary.”
The runway ahead is different for all of us, so how to create a life without regrets is not a cookie-cutter endeavor.
“Retirement is very personal,” Collinson said. “People retire at different ages and for different reasons.”
More retirees say surprise – they’re happier in retirement than they expected, (Getty Creative) ·Tom Marten via Getty Images
How about this for a 2025 intention: “Retirees with financial regrets should create a written financial plan,” Collinson said.
Factor in living expenses, loan repayments, savings and investments. Then look at how your asset allocation is split between bonds, cash and stocks so it’s balanced for your risk tolerance, age and goals. Review resources for guaranteed retirement income, health care needs, insurance coverage, taxes, and potential long-term care needs.
And don’t forget inflation.” He said, “There’s been a lot of retirements in the last few years. “Hopefully, inflation has come under control, but it will always pose a potential threat to retirees and their purchasing power.”
Only 19% of retirees have a written plan, he added. “But just because you’re already retired, that doesn’t mean you can’t do some retirement planning to know where you stand and encourage yourself.”
