Nobody wants to look back with regret. But for many retirees, that is the reality.
I don’t want to be a downer at this new 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 commitment, many retirees regret some of the decisions they made earlier in life when preparing for retirement,” Suzanne Ricklin, vice president of retirement solutions at Yahoo, told Yahoo Finance. Nationwide Financial. “More than 8 in 10 workers over age 45 regret not taking retirement savings more seriously when they were younger.”
Here are five of retirees’ biggest regrets:
Fewer than 1 in 4 retirees are very confident that they will be able to maintain a comfortable lifestyle in retirement, according to a new report from the nonprofit 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 home value among retirees is $114,000. But 1 in 4 retirees have no home equity.
According to researchers, more than two-thirds of retirees wish they had saved more and consistently, and half wish they hadn’t waited so long “to worry about saving and investing for retirement.”
“Many of today’s retirees lacked the awareness, knowledge, and access to resources necessary to successfully prepare for retirement,” Catherine Collinson, CEO and president of Transamerica Institute, told Yahoo Finance.
“Their careers began 40, 50 or more years ago, long before the advent of 401(k) plans and the social imperative for people to self-fund more of their retirement income,” he said.
For many women, the deficit is due to a late start. Research from Corebridge Financial found that more than 6 in 10 retired women wish they had started saving for retirement sooner; only about a quarter of them started saving and investing between the ages of 18 and 29. Worse yet, about 4 in 10 retired women say they didn’t start prioritizing their financial and retirement planning until age 41 or older, and 20% said they hadn’t started yet.
That?!
“This all points to the importance of saving early in your working years,” Terri Fiedler, president of retirement services at Corebridge Financial, told Yahoo Finance. “This was made clear and clear in our survey. Knowing what they know now, this was the number one piece of advice retired women would give their juniors about retirement planning.”
According to a new report, nearly 3 in 10 retirees began receiving benefits at age 62, which is the youngest possible age. (Getty creative) ·Douglas Sacha via Getty Images
One of the biggest mistakes people make when it comes to Social Security is claiming a much smaller benefit too soon. You can improve your chances of not outliving your savings by delaying receiving Social Security benefits, which will greatly increase your monthly check for decades.
But many people don’t wait (or can’t). The average age at which retirees began receiving benefits is 63, according to the Transamerica report. Nearly 3 in 10 retirees began receiving benefits at age 62, the youngest possible age, resulting in a greatly reduced benefit. Only a small fraction, 4%, of retirees waited until age 70.
That’s how math works. If you have the flexibility to delay benefits, the increase you get by waiting is substantial. By delaying taking your benefits from your full retirement age, or FRA, whether age 66 or 67, until age 70, you’ll earn delayed retirement credits. That’s roughly an 8% annual increase in your benefit each year until you reach age 70, when the credits stop accumulating.
While there are clearly good personal reasons to claim early, such as health concerns or financial constraints, the psychological pull is often what pushes retirees to write their checks sooner rather than later.
Perhaps the most important factor is the psychological ownership of Social Security benefits, according to Suzanne Shu, a marketing professor at Cornell University.
Nearly half of retirees said debt was an obstacle preventing them from saving for retirement, according to the Transamerica report.
And once they retired, nearly 7 in 10 reported having outstanding credit card debt, according to a survey by the Employee Benefits Research Institute (EBRI). That’s up from 4 in 10 four years ago.
And a third said their spending is much more than they can afford in 2024, almost double that of 2020 respondents.
Nearly 6 in 10 retirees retired early, according to Transamerica (Getty Creative) ·WC.GI via Getty Images
Sometimes the decision to retire is a regret. About a third of retirees regretted not working more, according to Olivia Mitchell, co-author of a paper published in the National Bureau of Economic Research.
The financial advantage of working past traditional retirement age is clear: more years of income and savings, not having to dip into retirement savings so those funds can remain invested and grow, and having the ability to delay applying of Social Security.
Sometimes, however, the choice is yours to make. More than half of EBRI respondents retired earlier than expected due to reasons beyond their control, such as health or disability issues, or changes to their company, such as downsizing, closing or reorganizing.
Nearly 6 in 10 retirees retired early, according to Transamerica. Only 1 in 5 retired early because they had the financial capacity.
Retirees typically regret not being emotionally prepared and having a plan for the transition to retirement and what’s next, Preston Cherry, a certified financial planner, told Yahoo Finance.
“These have answers to questions like: What am I going to do next? How am I going to do it? How am I going to reacclimate to my hobbies and get to know myself? said.
“They regret that it took them so long to give themselves permission to retire and then disconnect from an identity that they may be accustomed to, whether it’s their business or their corporate job.”
In general, retirees are happy, have close relationships with family and friends, enjoy life, have a positive view of aging, have a strong sense of purpose, and have an active social life.
In fact, more than 4 in 10 retirees have experienced improvements in their enjoyment of life and happiness since leaving the workforce, according to Transamerica data. Additionally, many spend more time with family and friends and pursue hobbies than they expected.
According to Corebridge research, more than half of retired women rate their financial health as good or very good, compared to just 38% of those who are not retired.
“One thing that stood out in the data is the fact that retired women are more likely to describe their financial health positively than those who are still in their working years,” Fielder said. “It is surprising that many women who have retired from the workforce seem to feel more secure about their finances than women who still earn a salary.”
The path ahead is different for all of us, so how to create a life without regrets is no easy task.
“Retirement is very personal,” Collinson said. “People retire at different ages and for different reasons.”
Do you have any questions about retirement? Personal finances? Anything career related? Click here to send Kerry Hannon a note.
More retirees say surprise: they are happier in retirement than they expected (Getty Creative) ·Tom Merton via Getty Images
How’s 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 split between bonds, cash, and stocks so that it’s balanced based on your risk tolerance, age, and goals. Review sources of guaranteed retirement income, health care needs, insurance protections, taxes, and potential need for long-term care.
And let’s not forget inflation. “Many retirees were caught off guard in recent years,” he said. “Inflation will hopefully come back under control, but it will always pose a potential risk to retirees and their purchasing power.”
Only 19% of retirees have a written plan, he added. “But just because you’re retired doesn’t mean you can’t plan for retirement so you know where you stand and give yourself a boost.”
Kerry Hannon is a senior columnist for Yahoo Finance. She is a career and retirement strategist, and the author of 14 books, including ““In control at 50+: how to be successful in the new world of work” and “You are never too old to get rich.” follow her on Blue sky.
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