Nearly 75% of adults say they have financial regrets, ranging from not saving early enough for retirement to saving too little for emergencies or carrying too much credit card debt.1 Yet entering retirement with regrets is not a forgone conclusion, especially for those willing to heed the sage advice of current retirees.
When asked what they wish they’d done better (or learned sooner) when preparing for retirement, retirees participating in a 2017 survey shared their top four tips:2
1. Don’t put off saving for retirement.
More than 36% of retirees advised people planning to retire to start planning today. (Similarly, 22% of participants in a separate survey cited not saving early enough as their chief financial regret.1)
2. Save more than you think you need.
Put away funds to outpace inflation and plan for unexpected expenses. Nearly one-third of current retirees report spending just as much or more money once they have entered retirement.
3. Take care of your health now.
Twenty-six percent said they underestimated the significant health challenges they’d face in retirement. For those with incomes between $100,000 and $150,000 in retirement, being vigilant about health was of utmost importance, while the guidance to save more dominated among those with incomes below $30,000 in retirement.
4. Don’t assume you’ll be able to work well into your retirement years.
Forty percent said they had to leave their jobs because they were let go or had health or family issues to tend to. Only 16.3% reported being able to retire early thanks to strong finances.
According to a 2017 Bankrate.com retirement survey, Baby Boomers are the most likely to regret not saving for retirement earlier. Yet, those nearing retirement are not the only one’s worried; 18% of Gen Xers and 11% of Millennials also expressed concerns about not beginning to save early enough.1
It’s never too early or too late to begin saving – or saving more – for retirement.
While the benefits of saving early for retirement can’t be overstated, it’s important to remember that there’s no better time than today to begin saving or increasing your current savings rate. Begin by maximizing contributions in any qualified retirement plans you’re eligible to participate in, such as a 401(k) or individual retirement account (IRA). If you’re over age 50, take advantage of the opportunity to make annual catch-up contributions in these plans. The more you save now, the greater the opportunity to realize the power of tax-deferred compounding on investment earnings over time.
For information on strategies to help optimize your income in retirement, give us a call today.