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What are 4 Things Most Regretted by Retirees?

What are 4 Things Most Regretted by Retirees?

April 29, 2024

When I was a kid, retirement was simpler. People worked at a big job, got to the rule of 90 (number of years of service plus current age equals 90 or more), retired with maybe 70% of their high five average earning years in pension and full medical benefits. Then they mostly went to the golf course or fishing, did a bit of traveling and died of a heart attack within five years.

Today, things are more complicated. On a couple fronts. First, most of us will rely on money we saved into our company retirement plan to replace a pension. The vast majority of us will rely on Medicare for health benefits. And the majority of us will live for 25 years or more in retirement.

So, if you are approaching the Retirement Red Zone, (The five years before and the 10 years after you quit working at the big job.) you would be wise to think about four things that most current retirees regret in their retirement journey.

According to a recent survey by Consumer Affairs, 46% of retirees do not feel they've accomplished their dream retirement. Just 14% feel they're living the life they planned for in retirement, while 40% feel they've somewhat reached their goal. 

The study found that many current retirees' regrets are related to their finances. The average retiree has around $172,000 saved by retirement age, according to the Transamerica Center for Retirement Studies, factors like inflation and rising healthcare costs are chipping away at their savings faster than anticipated. 

Failing To Save And Invest Earlier In Their Career

Consumer Affairs found that 51% of retirees regretted not saving sooner, and 36% wish they'd invested earlier on.

First, let’s note a difference between saving and investing

  • Saving is keeping some of the money you earn.
    • I urge clients to keep at least 6 months of basic expenses saved in a passbook account at the bank. Just in case.
    • Additional saving, can be directed to investments aimed at longer-term goals like retirement.
  • Investing is buying stocks, bonds, or other assets that you anticipate will increase in value over time.
    • Prudent investments should grow faster than the pace of inflation.
    • When investments grow faster than inflation, $100 of saving will buy you MORE than $100 of spending at a future time.

Second, note that the longer you let investments compound, the better the overall return will be

But, even if you are already in your 50s, you might have 10 – 15 years before you choose to stop working your career job. In that time a prudent investment COULD double twice. Based on the rule of 72, an investment growing at a rate of 9% each year will double every 8 years.

Failing To Save More of Their Income

Most experts agree that a prudent target is to save 20% of your gross earnings each year toward retirement. Thirty-nine percent of retirees regret not saving more of their income toward retirement, according to the Consumer Affairs survey. This is an easy thing to check when you visit with your fiduciary financial planner. She can help you asses whether your current saving rate is on track to have you ready on the day you wish to retire.

And, if you don’t have a fiduciary financial planner already, I am ALWAYS happy to meet new people. I love to meet new people. So, follow this LINK to find a time for us to have a get-acquainted visit.

Failing To Get In Better Physical Health

A third of retirees regretted not taking better care of their health ahead of retirement, Consumer Affairs found. I hope most readers have heard by now how important it is to stay healthy as we age. People in their 50s and 60s benefit significantly from higher levels of activity. Fidelity estimates that a couple retiring at 65 will need $315,000 saved to cover their healthcare expenses. If you enter retirement in generally better health, and you work to stay fitter, you can reduce this number. But, most of us will still be surprised by who much we spend on health care in older age. Start a Health Savings Account today.

Failing To Get Debt-Free Before Retirement

Sixteen percent of retirees regretted not paying off their debts before reaching retirement age, and an additional 16% wished they had paid off their mortgage before leaving the workforce. For most couples entering retirement, reducing the monthly bills is a HUGE factor in the success of their retirement strategy. Paying off debt can make a big difference. Today 77% of Americans have some form of debt, according to data from the U.S. Census Bureau.

If you think you might want help working on these four topics, or if you have other questions about how to be really and truly ready for the day you quit the big career job, you might want to visit with an experienced, highly-trained, CERTIFIED FINANCIAL PLANNER™ professional and Behavioral Financial Advisor in West Saint Paul, Minnesota to help better understand your options. I love to meet new people. So, follow this LINK to find a time for us to have a get-acquainted visit.

I am a financial planner who is an advocate for my clients ALL THE TIME – a fiduciary financial planner. I provide guidance based on clients’ best interests, not commissions or sales quotas. I think it’s the best way to serve clients and I am thrilled to work this way all the time.

And yes, I’m still taking on a few great families to be part of my financial planning practice in West Saint Paul, Minnesota and, thanks to Zoom, across the country.

Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.