Learn from regrets retirees have about their retirement finances.
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Pre-retirees face several critical decisions that will significantly impact their financial security in retirement. These decisions include when to retire, when to start Social Security benefits, how to deploy retirement savings to generate lifetime retirement income, and what elections to take regarding medical insurance and Medicare. Because these decisions significantly affect retirees’ financial security, they’re the topic of many articles that contain analyses and numbers that can help inform your choices.
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But analyses and numbers aren’t enough. You’ll also want to consider potential emotions you might feel throughout your retirement, especially regrets you might experience in the future if you’ve made the wrong decisions.
So what can you do now to avoid these regrets? We can get key insights from professional surveys of retirees and the elderly.
Recent retirees often have regrets about money, since they’re experiencing the consequences of their actions. Common regrets among older people include not saving enough money, according to a recent survey from the Nationwide Retirement Institute. For example, more than half (55%) of recent retirees have regrets about how they saved for retirement, including wishing they’d begun saving earlier and wishing they’d contributed more to their savings. Just two in five respondents reported they’re on track with their retirement budget and plan for withdrawing from their savings. As a result, more than one in five retirees said they had to be more conservative with their spending than they had planned.
Another survey from Nationwide reported that half of surveyed retirees would advise their younger selves to maintain a healthy diet. And almost half of those surveyed would advise their younger selves to be more active and proactive in managing their health. Nearly three out of four retirees wish they understood Medicare better.
A recent survey of retirees titled Retirement Realities from the Transamerica Center for Retirement Studies (TCRS) reported similar results:
“Retirees have a wealth of life experience, perspectives, and lessons learned that can help younger generations as they save, invest, and plan for retirement,” said Catherine Collinson, founding CEO and president of TCRS. She added, “Achieving a secure retirement is the culmination of a lifelong journey of learning and growing personally and professionally, working, saving, investing, and safeguarding our health.”
One analysis from the Retirement Manifesto lists these top five money regrets from retirees:
These regrets are consistent with another list of retiree regrets prepared by author and columnist Kerry Hannon. Her list also includes another regret we haven’t mentioned yet: “No transition planning.” This means giving yourself permission to retire and planning for what’s next.
All these concerns are consistent with my observations of retired relatives, friends, and neighbors in their 70s and beyond.
Plan, plan, plan is the advice for pre-retirees who anticipate having these financial regrets in retirement. Start with understanding the most consequential decisions you face and making informed decisions. Learn as much as you can from trusted publications. Shop for a qualified retirement advisor who has your best interests at heart.
ForbesWhat’s Your Plan For Financial Security In Retirement?By Steve VernonPlanning to avoid these potential regrets can put you on a path for financial security for the rest of your life.
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