The Top Financial Regrets of RETIRED americans and how to avoid them

May 13

In episode 61, I shared the top financial regrets of Americans and how to avoid them but in this episode, I’ll share the top regrets of Retired Americans and how to avoid them. The future is unknown so no one can plan their retirement perfectly we will all have some regrets, but it’s important to be aware of what the most common regrets are for retirees so we can take action now to avoid them in the future. In the tips, tricks, and strategies portion, I will share a tip regarding how to spend more in retirement

In this episode...

78% of retirees wish they would have saved more [2:10]

Retire Earlier [13:44]
Dynamic Retirement Spending Strategies [15:59]

More than 6 in 10 retirees say they would go back and change their retirement planning if they had the opportunity. This comes courtesy of a survey conducted by the Lincoln Financial Group and their results reveal many of the top regrets of retirees. businesswire.com referenced this survey and also shared 10 ways today’s retirees say they would have planned differently.

Save More

According to an annual study by the Transamerica Center for Retirement Studies, a full 78% of retirees wish they would have saved more. The majority (70 percent) would advise changing savings habits by saving or investing more or earlier. Other savings regrets included not making the most of their 401(k) plan, not enrolling in the plan early enough, and not saving the maximum amount allowed by their plan. What if I told you that if you invested $5000 per year for 40 years from age 25 to age 65 ($200,000 total) you could then withdraw ~$140,000 each year for the following 30 years?

Not having a plan for retirement

According to a Transamerica study it found that only 18% of retirees have a written plan. This is one of my favorite things to do with clients when we plan financially. As we enter the data in their financial plan, and add their goals and wishes, it shows them everything that is possible. It’s especially great when I am able to surprise clients by telling them they can retire much sooner than they thought they could.

Plan more carefully for the fun they want to have in Retirement

Two-thirds of pre-retirees (68%) have not completed a budget of anticipated income and expenses, according to Fidelity Investments. With the proper financial plan, I can show how they can spend much more in the earlier years, while they have the best health to do so. It’s highly unlikely you will run out of money.In fact, overall, the retiree finishes with more than double their starting wealth in a whopping 2/3rds of the scenarios, and is more likely to finish with quintuple, or 5 times, their starting wealth than to finish with less than their starting principal.

Plan For Health Care

Many people are surprised when they hear that Medicare does not cover everything. The annual expenses for a couple in retirement are around $12,000. One of the best things a person can do to prepare for healthcare costs in retirement is to exercise regularly. In episode 29 of this podcast I shared how many retirees can have a healthy wealthy and wise retirement.

Learn more about Personal Finance

A full 66% of retirees wish they were and had been more knowledgeable about financial planning.

Plan and make moves to protect money from taxes

Ed Slott the tax guru calls pre-tax retirement accounts a ticking tax time bomb. Every spring I hold strategy meetings with my clients that focus on strategies that ensure they don’t pay more taxes than they are required. In episode 15 I share about the ticking tax time bomb in retirement.

Anticipate the unexpected

we don’t have to look back too far to think of an example of the unexpected, namely Covid. Many retirees had planned to travel during 2020 and 2021 only to see those plans scuttled by the reactions to the pandemic.

Plan for Income

It can be challenging on how to turn your savings into income but once you do it can provide peace of mind.

Have less Debt

One-third of retirees regret not paying off debts sooner. In episode X I explained whether you can retire with debt.

Retire Earlier

In episode 26 I shared about mini-retirement and how these can be a great way to enjoy moments of retirement sooner. Also, I shared in episodes 50 and 52 about the book Die with Zero whose title belies the true message of the book. I will always remember when a dear friend let me know after her husband had passed away in his 50s, that she was so relieved that they hadn’t waited to go on adventures and had went on many when they were younger.

Tips Tricks and Strategies

When it comes to retirement spending there really are two huge risks which are: running out of money and dying with too much money. To combat these conflicting risks I use a dynamic distribution strategy that allows clients to maximize their level of spending but, also ensures they won't run out of money.

References

Retirement Regrets: Top 10 Things Retirees Wish They Would Have Done Differently

7 Retirement Mistakes You Will Regret

10 Retirees Share Their Biggest Regrets

Over 60% of retirees wish they could get a “do-over”