Avoiding Retirement Regrets: A Fresh Start
As we embark on a new year, it’s essential to reflect on the common mistakes retirees wish they had avoided. By learning from their experiences, we can create a more secure and fulfilling retirement.
The Importance of Early Savings
According to a recent report, fewer than 1 in 4 retirees are confident they can maintain a comfortable lifestyle throughout their retirement. The median household savings among retirees, excluding home equity, is a mere $71,000. More than two-thirds of retirees wish they had saved more and started earlier. Catherine Collinson, CEO and president of Transamerica Institute, notes that many retirees lacked the awareness and resources to prepare for retirement, which began 40 or 50 years ago.
Women’s Late Start
Research from Corebridge Financial reveals that over 6 in 10 retired women wish they had started saving for retirement earlier. Only about a quarter of them began saving between 18 and 29 years old. Terri Fiedler, Corebridge Financial president of retirement services, emphasizes the importance of saving early, as this was the top piece of advice retired women would give their younger selves.
Social Security Mistakes
One of the biggest mistakes people make is claiming Social Security benefits too early, resulting in a lower benefit. Delaying benefits can increase your monthly check substantially. However, many people don’t wait, with the median age of retirees starting benefits at 63. Only 4% of retirees waited until age 70, when the benefits increase significantly.
Debt and Spending
Nearly half of retirees said debt prevented them from saving for retirement, and almost 7 in 10 reported carrying outstanding credit card debt. One-third said their spending is much higher than they can afford. Preston Cherry, a certified financial planner, notes that retirees often regret not preparing emotionally and having a plan for the transition to retirement.
Working Longer
About one-third of retirees regret not working longer, which can provide more years of earning and saving. However, sometimes the decision to retire is made for you, with over half of those surveyed retiring earlier than expected due to reasons beyond their control.
Creating a Life Without Regrets
Retirement is highly personal, and people retire at different ages and for different reasons. To avoid regrets, it’s essential to create a written financial plan, factor in living expenses, debt repayment, savings, and investments. Review sources of guaranteed retirement income, healthcare needs, insurance protections, taxes, and the possible need for long-term care. Only 19% of retirees have a written plan, but it’s never too late to start.
A Fresh Start
As we begin a new year, let’s take control of our retirement planning. By learning from retirees’ regrets, we can create a more secure and fulfilling retirement. Remember, it’s never too late to start planning and making adjustments to ensure a happy and financially stable retirement.
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