No one wants to look back and regret. But for many retirees, that is true.
You don’t have to be a slob at this new start of the year, but it helps to feel some retirement regrets — especially if you’re closing in on retirement.
“Despite advances in saving habits and financial engagement, many retirees regret some of the decisions they made earlier in life as they prepared for retirement,” Suzanne Ricklin, vice president of retirement solutions at Nationwide Financial, told Yahoo Finance. “More than 8 out of 10 workers over the age of 45 regret not taking saving seriously when they were younger.”
Here are five of the biggest regrets of retirees:
Fewer than 1 in 4 retirees are very confident that they will be able to maintain a comfortable lifestyle during their retirement, according to a new report by the nonprofit Transamerica Center for Retirement Studies.
The average household savings among retirees, excluding home equity, in this survey is just $71,000. The median home equity among retirees is $114,000. But 1 in 4 retirees have no home equity.
More than two-thirds of retirees wish they had saved more and more consistently — and half wish they hadn’t waited so long to “worry about saving and investing for retirement,” according to researchers.
“Many of today’s retirees lack the awareness, knowledge, and access to resources needed to successfully prepare for retirement,” Catherine Collinson, CEO and president of the Transamerica Institute, told Yahoo Finance.
“Their careers started 40 or 50 or more years ago — long before the advent of 401(k)s and the social responsibility for people to self-fund a large portion of their retirement income,” he said.
For many women, the deficiency is due to late onset. Research from Corebridge Financial found that more than 6 in 10 female retirees wish they had started saving for retirement earlier – almost a quarter of them started saving and investing between the ages of 18 and 29. Even worse, nearly four in ten retired women said they didn’t start prioritizing their financial and retirement plans until 41 or later, and 20% said they still haven’t started.
What?!
“All of this points to the importance of saving early in your working years,” Terri Fiedler, Corebridge Financial’s president of retirement services, told Yahoo Finance. “This is very clear in our research. Knowing what they know now, this was the No. 1 tip.
About 3 in 10 retirees started receiving benefits at age 62, the earliest possible age, according to a new report. (Getty Creative) ·Douglas Sacha via Getty Images
One of the biggest mistakes people make when it comes to Social Security is claiming too early with too little benefit. You can improve your chances of not losing your savings by delaying taking Social Security benefits, which will increase your monthly paycheck for decades.
But most people don’t – or can’t – wait. The average age at which retirees start receiving benefits is 63, according to the Transamerica report. About 3 in 10 retirees started receiving benefits at age 62, which is the earliest possible age, resulting in significantly reduced benefits. Only a small fraction, 4%, of retirees waited until age 70.
Here’s how the math works. If you can delay benefits, the upside you get from waiting is huge. By pushing back your benefits from your full retirement age, or FRA — either age 66 or 67 — until you’re 70, you earn delayed retirement credits. Those amount to roughly an 8% annual increase in your benefit each year until you reach 70, when the credits stop accumulating.
While there are obvious personal reasons for claiming early, such as poor health or financial problems, psychological stress often pushes retirees to cash their checks early.
Perhaps the biggest factor is psychological ownership of a person’s Social Security benefits, according to Suzanne Shu, a marketing professor at Cornell University.
About half of retirees say debt is a stumbling block to saving for retirement, according to a Transamerica report.
And when they retire, nearly 7 in 10 report having outstanding credit card debt, according to a study by the Employee Benefit Research Institute (EBRI). That’s up from 4 in the last 10 years.
And one-third said their spending is more than they can afford in 2024, nearly double the number of respondents from 2020.
Nearly 6 in 10 retired earlier than planned, according to Transamerica (Getty Creative) ·WC.GI via Getty Images
Sometimes the decision to retire is regrettable. About one-third of retirees regret not working longer, according to Olivia Mitchell, co-author of a paper published in the National Bureau of Economic Research.
The financial benefit of working past normal retirement age is obvious: more years of earning and saving, no need to dip into retirement savings to keep those funds invested and growing, and the ability to delay claiming Social Security.
Sometimes the choice, however, is made for you. More than half of those surveyed by EBRI quit earlier than expected due to reasons beyond their control, such as health problems or disability, or changes in their company, such as downsizing, closure, or restructuring.
About 6 in 10 retired earlier than planned, according to Transamerica. Only one in five retired early because they were financially able.
Retirees often regret not preparing emotionally and having a plan for the transition to retirement and what comes next, Preston Cherry, a certified financial planner, told Yahoo Finance.
“These have answers to questions like: What am I going to do next? How will I do it? How will I relearn the things I love and know myself?” he said.
“They regret that it took them so long to give themselves permission to retire, and then give up an identity that they might have been used to – be it their business or business.”
In general, retirees are happy, have close relationships with family and friends, enjoy life, have a positive outlook on 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, Transamerica data found. In addition, many actually spend more time with family and friends and pursuing hobbies than they expected.
More than half of retired women rate their financial health as good or very good, compared to just 38 percent of non-retirees, according to Corebridge research.
“One thing that stood out from the data is that retired women are more likely to describe their financial health well than those in their working years,” said Fielder. “It is surprising that many women who have retired seem to be more secure with their finances than women who are still earning.”
The runway ahead is different for all of us, so the path to creating a life without regrets is not a cookie-cutter endeavor.
“Retirement is very personal,” Collinson said. “People retire at different ages and for different reasons.”
Have a question about retirement? Personal finance? Something related to work? Click here to leave Kerry Hannon a note.
Many retirees say they’re surprised—they’re happier in retirement than they expected, (Getty Creative) ·Tom Merton via Getty Images
How about this for a 2025 goal: “Retirees who have financial regrets should create a written financial plan,” says Collinson.
Factor in cost of living, debt payments, savings, and investments. Then consider how your asset allocation is divided between bonds, cash, and stocks to fit your risk tolerance, age, and goals. Review sources of guaranteed retirement income, health care needs, insurance coverage, taxes, and the potential need for long-term care.
And don’t forget inflation.”Many retirees have been caught off guard in the last few years,” he said. “We hope that inflation is back under control, but it will continue to pose a 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 make retirement plans so you know where you stand and empower yourself.
Kerry Hannon is a Senior Columnist at Yahoo Finance. He is a career and retirement strategist, and the author of 14 books, including “Managing at 50+: How to Succeed in the New World of Work” and “Never Too Old to Be Rich.” Follow him Bluesky.
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