No one likes having regrets.
And yet, we all have them.
Regarding the regrets of retirees, a recent study reveals some interesting findings that we can all learn from. Studying the data can reduce our chances of suffering the same fate.
Today, I’m sharing some fascinating charts from the study that highlight the most common regrets of retirees.
More importantly, I’m sharing some thoughts on steps you can take to avoid them.
Take action now to live a retirement without regrets.
After all, you’ve earned it.
The top regrets of retirees and suggestions to avoid the same fate. Here are the facts, supported by some great charts… Share on X
I enjoy studies that provide objective research into the lives of retirees, and the 24th Annual Transamerica Retirement Survey is a good one. To compile the following list of top regrets of retirees, I studied all 77 pages of that study and conducted additional research about the top regrets of retirees. I’ve summarized the results in the list presented below.
In addition to listing the top regrets, I’m adding my thoughts on practical steps to avoid the same fate in our retirements.
With that, here are the top regrets of retirees:
1. Not Saving Enough
The study included a lot of charts of the savings level of the average retiree. I love charts…
I found the following chart interesting. Excluding home equity, only 13% of retirees have $1 million or more saved. Shockingly, 37% of retirees have $50k or less in savings. I suspect the typical reader of my blog is in better shape than the median savings level of $71k:
Given the savings data above, it’s no surprise that 30% of retirees are having trouble making ends meet:
The #1 top regret of retirees is not saving enough money, with 76% wishing they had saved more consistently.
In addition, 68% of retirees wish they would have been more knowledgeable about retirement saving and investing, and 49% waited too long to concern themselves with saving for retirement.
Steps To Avoid This Regret:
The painful reality is that the best way to avoid this regret is to start saving early and consistently through your working years. Unfortunately, many people realize too late that they should have been saving more. If that’s you, take comfort in the fact that there is still hope. In my article “It’s Never Too Late To Start Saving For Retirement,” I told the story of a couple that had nothing saved at age 49, yet retired at age 63. The key is to get very serious, very quickly. Cut expenses, increase savings, and consider taking a second job if necessary.
If you’re behind in your savings, I’d also encourage you to check out the Catching Up To FI podcast, which focuses on “financial independence for late starters.” Their Facebook Group has over 16k members and is a supportive community. Bill and Jackie are the hosts, and they’re great folks (they’re also friends of mine, so tell them I said “hi” if you decide to join their group).
2. Starting Social Security Too Early
Given the low savings rate above, it’s not surprising that many retirees have to claim Social Security at the earliest possible date. As the chart below shows, the median age for claiming SS is 63, with 29% claiming at age 62:
Unfortunately, starting Social Security too early typically reduces the amount of Social Security income you’ll receive over your lifetime. As I wrote in How To Determine When To Claim Social Security, there is a break-even age (typically in your mid-80s). If you live longer than the break-even age, your lifetime income will be higher if you defer claiming, as is typically recommended. Unless you have major health issues and expect to have a shortened lifespan as a result, delaying your SS is one of the best inflation hedges you can have later in life.
Social Security is one of the best tools in your toolbox to ensure your money outlives you.
And yet, the chart above demonstrates that only 19% of retirees wait until age 66 or later to claim SS. 58% of retirees cited SS as their primary source of income throughout their retirement, and it’s unfortunate that so many people sub-optimize this important piece of their retirement income puzzle.
At the same time, I empathize with the large percentage of folks who have no choice, as indicated by the fact that 36% of retirees report incomes of $50k or less, and likely have no choice but to claim at their earliest possible date:
Finally, there is an issue with folks understanding their government benefits, as indicated in the following chart. Note that only 33% of retirees admit to having “a great deal” of understanding regarding Social Security (also concerning is the 30% who have a good understanding of Medicare – a topic I’m considering for a future post):
Steps To Avoid This Regret:
I encourage every retiree to understand the implications of their Social Security claiming decision. At a minimum, everyone should spend 15 minutes with The Open Social Security Calculator to see what it recommends before making your decision. If you don’t have the financial resources to allow you to defer, at least you’ll have made an educated decision, which would go a long way to reduce your future regrets.
3. Retiring With Too Much Debt
I was surprised by the following chart, which shows that half of retirees have non-mortgage debt:
Fortunately, the median non-mortgage debt is “only” $5,000, but I found it surprising that 19% of retirees have $25,000 or more in non-mortgage debt. While 60% of retirees have no mortgage, a surprising 14% have mortgage debt of $100k or more. When you add in the fact (from #2 above) that the median retiree income is $55k, it’s unsurprising that so many retirees regret struggling with debt.
As the following chart shows, 30% of retirees are prioritizing paying off credit card debt, and 29% are “just getting by” to cover basic living expenses:
It saddens me that almost a third of retirees are “just getting by,” at a period in their lives where they should be focused on enjoying the freedom they’ve worked so long to obtain. While you may think you can wait until retirement to address your debt, the reality is that almost one in three retirees (32%) indicate current retirement expenses are more than expected. It won’t get easier with time. Deal with your debt.
Debt isn’t freedom.
Steps To Avoid This Regret:
If you’re within 10 years of retirement and continue to struggle with debt, it’s time to get serious. Cut up your credit cards (or put them in a bowl of water and place them in your freezer). It may be hard, but your future self will thank you. No one wants to deal with the anxiety that debt produces, especially once your paycheck stops.
And…as we’ll see below, your odds are greater than 50% that your paycheck will stop sooner than you expect.
If you’re in your final years of work, consider developing a side hustle that may become something you enjoy doing in retirement. In addition to helping you pay off some debt, you’ll get a jump start on developing other interests for your retirement years. If you’re retired and dealing with debt, consider taking on a part-time job, and dedicate every dollar earned to paying off your debt. Cut back on recurring expenses (do you really need that Amazon Prime subscription when you’re already struggling with debt?), and track all of your spending for a few months to see what you can cut from your spending. Debt is a dangerous trap, learn from the regrets of retirees who have gone before you and make eliminating it a priority while you still can.
4. Retiring Too Soon
The research is clear and consistent, over half of people are forced into retirement sooner than planned. I’ve written about this on numerous occasions, but it bears repeating. The Transamerica study confirms the fact, with their findings that 58% of people retired sooner than planned:
While you may THINK you’ll be able to work until age 65 or later, the reality is that you have a greater than 50% chance of retiring sooner than you’d like. The survey found that 59% retire before the age of 65, with the median retirement age being only 62 years.
None of us know the future, but it helps to study research to see what may lie ahead. You may be healthy and feel that your employment is secure, but note the following facts regarding WHY people retire earlier than planned:
46% personal health
43% employment-related
The chart below outlines some of the realities that others have faced. How certain can you be that you won’t face the same?
Steps To Avoid This Regret:
If you’re planning on retiring in 5 years, ask yourself what will happen if you get forced into retirement next year. Don’t assume you’ll be able to hang on to your job until you’re age 65. Once you reach the age of 55, you need to get serious about your retirement preparation. Even if you’ve done a decent job up to this point, realize you probably don’t have as long as you think to save for retirement.
Increase your savings rate by 3% now. Automate it, and learn to live on the balance. Get aggressive in reducing your expenses to get by on a slightly smaller paycheck. If past trends continue, and there’s no reason to believe they won’t, you’ll probably retire sooner than you think.
Save more, now. Your future self will thank you.
5. Not Prioritizing Health
A shocking two-thirds of Americans 65 and older “wish they’d taken their health more seriously when they were younger”, based on a poll presented in this article. Also from that study:
81% of Seniors admit their health could be better.
46% don’t have any goals in place for aging well.
21% ignore exercise advice from their doctor.
30% believe they would visit their doctor less frequently if they had taken better care of themselves.
Let’s face it, retirement isn’t nearly as much fun if you don’t have the fitness level required to do the things you want to do. As the following chart shows, 73% of retirees are concerned about health in older age.
It’s a valid concern, as we all realize there will come a day when we will face a decline. I face the same fear, and the impact of losing our health was made more “real” to me in the past month. A short story is in order:
A month ago, I suffered a severe sprain in my left ankle. I hobbled around for a few weeks and was forced to cut back on my normally active lifestyle. Last week, as I was finally close to being back to normal, I took a nasty fall on the ice while walking the dogs and blew out my right ankle. I’m back to hobbling.
I hate it.
While it’s a minor injury and will (hopefully) fully recover with time, I’ve experienced a month of limited mobility. I’ve decided to view it introspectively and think about the reality that a time will come when I won’t be able to do the things I enjoy doing. It’s made me appreciate my good health and rededicate my focus on doing everything I can to maintain my health. I exercise regularly (except for the last month, argh), I try to eat well, and I get 8 hours of sleep. I plan on continuing that focus for the rest of my life.
Learn from the regret of retirees ahead of you on their journey. You’ve talked about getting in better shape for years, but have you taken steps to implement an exercise program? Based on the research, 46% of retirees don’t have goals for how to age well. If you’re in that group, take action now.
Focus on your health, while you still can.
Conclusion
These past 6 1/2 years of retirement have been the best years of my life.
The same can be true for you. A great retirement doesn’t happen automatically, however.
Learn from the regrets of retirees ahead of you on the trail. Recognize the areas where you could be at risk of having future regrets, and take steps now to minimize that risk.
A bit of planning goes a long way. An effective plan is regularly reviewed, modified as appropriate, and followed.
Put your plan in place now, or modify your existing plan based on the experience of others.
Minimize your regrets.
Your future self will thank you.
Your Turn: Do you have any regrets in retirement? What do you wish you’d have done differently? Let’s chat in the comments…
