No one ever wants to look back with regret. But for many retirees it is a reality.
I don’t want to be down at this new beginning time of year, but it’s helpful to hear the regrets of retirees — especially if you’re approaching retirement yourself.
“Despite improvements in savings habits and financial engagement, many retirees regret some of the decisions they made earlier in life when preparing for retirement,” Suzanne Ricklin, vice president of retirement solutions at Nationwide Financial, told Yahoo Finance. “More than 8 out of 10 workers over the age of 45 regret not saving for retirement more seriously when they were younger.”
Here are the five biggest regrets of retirees:
Fewer than 1 in 4 retirees are very confident that they will be able to maintain a comfortable lifestyle during their retirement, according to new report of the non-profit Transamerica Center for Retirement Studies.
The estimated median household savings among retirees, excluding home equity, in this survey is just $71,000. The estimated median net worth of retirees is $114,000. But 1 out of 4 retirees do not have their own capital.
More than two-thirds of retirees wish they had saved more and on a consistent basis — and half wish they hadn’t waited so long “to get into retirement saving and investing,” according to researchers.
“Many of today’s retirees lacked the awareness, knowledge and access to resources needed to successfully prepare for retirement,” Catherine Collinson, CEO and president of the Transamerica Institute, told Yahoo Finance.
“Their careers started 40 or 50 or more years ago — which was long before the advent of 401(k)si’s and the societal imperative for people to self-fund more of their retirement income,” she said.
For many women, the disadvantage stems from a late start. Research from Corebridge Financial found that more than 6 in 10 female retirees wish they had started saving for retirement earlier – only around a quarter of them started saving and investing between the ages of 18 and 29. Worse, about 4 in 10 retirees say they didn’t start prioritizing their financial and retirement planning until age 41 or later, and 20% said they still haven’t started.
What?!
“All of this points to the importance of saving in the early working years,” Terri Fiedler, president of retirement services at Corebridge Financial, told Yahoo Finance. “That became loud and clear in our survey. Knowing what they know now, this was the No. 1 piece of advice retired women would give their younger counterparts about retirement planning.”
Nearly 3 in 10 retirees started receiving benefits at age 62, the earliest possible age, according to a new report. (Getty Creative) ·Douglas Sacha via Getty Images
One of the biggest mistakes people make when it comes to Social Security is filing too early for a much lower benefit. You can improve your odds 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. The average age at which retirees began receiving benefits is 63, according to the Transamerica report. Almost 3 out of 10 retirees started receiving benefits at age 62, the earliest possible age, resulting in a significantly reduced benefit. Only a small part, 4% of pensioners, waited until the age of 70.
Here’s how the math works. If you have the flexibility yes late feesthe increase you get by waiting is significant. By delaying taking your benefits from your full retirement age, or FRA — either 66 or 67 — until age 70, you’ll earn deferred retirement credits. That translates to roughly an 8% annual increase in your benefit for each year until you reach age 70, when credits stop accumulating.
While there are clearly good personal reasons for filing early, such as poor health or financial constraints, the psychological issue is often what drives retirees to run their checks earlier rather than later.
Perhaps the biggest factor is psychological ownership of Social Security benefits, according to Suzanne Shu, a marketing professor at Cornell University.
Nearly half of retirees said debt was a stumbling block that prevented them from saving for retirement, according to a Transamerica report.
And after they retire, nearly 7 in 10 report having outstanding credit card debt, according to a poll from the Employee Benefits Research Institute (EBRI). That’s up from 4 in 10 four years ago.
And one-third said their spending is much more than they can afford in 2024, nearly double that of 2020 respondents.
Nearly 6 in 10 retirees retire early, according to Transamerica (Getty Creative) ·WC.GI via Getty Images
Sometimes the decision to retire is a regret. About one-third of retirees regret not working longer, says Olivia Mitchell, co-author of the paper published in National Bureau of Economic Research.
The financial advantage of working past the traditional retirement age is clear: more years of earning and saving, unnecessary dipping into retirement savings to keep those funds invested and growing, and the ability to decline Social Security claims.
However, sometimes the choice is made for you. More than half of respondents 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, closings or reorganizations.
Nearly 6 out of 10 retirees retired earlier than planned, according to Transamerica. Only 1 in 5 retired early because they were financially able.
Retirees typically regret not preparing emotionally and not having a plan for the transition to retirement and what’s next, Preston Cherry, a certified financial planner, told Yahoo Finance.
“They have answers to questions like: What am I going to do next? How will I do that? How am I going to get used to hobbies again and get to know myself?” he said.
“They regret that it took them so long to give themselves permission to step back and then break away from an identity that they may have been accustomed to — whether it’s a job or a corporate job.”
In general, retirees are happy, have close relationships with family and friends, enjoy life, have a positive outlook on aging, have a strong sense of purpose, and have an active social life.
In fact, more than 4 in 10 retirees have experienced an improvement in life enjoyment and happiness since leaving the workforce, according to Transamerica data. In addition, many are actually spending more time with family and friends and pursuing hobbies than they expected to be possible.
More than half of retired women rate their financial health as good or very good, compared to just 38% of non-retired women, according to Corebridge research.
“One thing that stood out in the data was the fact that retired women were more likely to describe their financial health more positively than those still in their working years,” Fielder said. “Surprisingly, many women who have retired seem to 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 an easy task.
“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 Merton via Getty Images
How about this for a 2025 intention: “Retirees with financial regrets should create a written financial plan,” Collinson said.
Consider living expenses, debt repayment, savings and investments. Then look at how your asset allocation is divided between bonds, cash and stocks so that it is balanced for your risk tolerance, age and goals. Review sources of guaranteed retirement income, health needs, insurance coverage, taxes and possible long-term care needs.
And don’t forget inflation. “Many retirees in the last few years have been caught off guard,” she said. “Hopefully inflation is back under control, but it will always be a potential risk for retirees and their purchasing power.”
Only 19 percent of retirees have a written plan, she added. “But just because you’re already retired doesn’t mean you can’t plan for retirement so you know where you stand and give yourself a boost.”
