“If I only knew then what I know now!” Many of us have uttered those words time and time again when we consider the choices we should have made decades ago. Nowhere are those “if only” regrets more acute than in the area of finances, especially when it comes to preparing for retirement. If we could get a better handle on the financial regrets of those who have gone before, maybe we could make better decisions and avoid stumbling into the same money mistakes as our forebears.
What Are Your Biggest Financial Regrets?
That’s the point of this insightful article published late last year on the Motley Fool financial website. “Here Are Senior Citizens’ Biggest Financial Regrets,” the article is called – “Don’t Make Them Yours.” The article is based on a survey of 1,000 adults age 65-plus done last year by a financial services firm called Lend EDU (www.lendedu.com). Respondents were asked to mentally turn back the clock four or five decades and consider what was their biggest financial regret from their twenties. As Motley Fool put it, “You know you could learn a lot from your grandparents, right? You can learn even more from more grandparents – from a host of senior citizens, in fact.” The article suggests that, if we check out the long list of financial regrets shared by these seniors – assuming we still have time – we’ll change our ways and make better decisions going forward.
To us at AgingOptions, and probably to our blog readers as well, the responses to the survey aren’t particularly surprising, but they do point out once again how many of us live in denial of some basic facts about retirement planning. Forty years or more ago, the majority of American workers retired with a pension, while today that number is below ten percent and dropping. Retirement savings have not kept up, as the survey results show, which causes a large and growing percentage of people to face retirement, not with satisfaction or anticipation, but with fear that they will run out of money and become a burden to those they love. As we’ll describe below, we at AgingOptions offer a better way to build a retirement plan that is comprehensive and secure. Read on and we’ll give you some important details.
Financial Regrets: Here’s What the Survey Says
For now, though, let’s take a look at the survey answers. Here’s a summary of most of the things that 1,000 retirement-age Americans listed as their biggest financial regrets – the things they wish they could go back in time and do over:
- Savings and Spending: Regrets related to poor saving and spending habits topped the list. More than one respondent in five told researchers that they hadn’t saved enough for retirement. About one in six regretted having spent too much money on nonessential things. (Interestingly, only a small handful, about 3 percent, said their biggest regret was not having saved enough for their children’s education.) As Motley Fool suggests, “A key reason that many people don’t save enough for retirement is that they simply don’t know how much they should save.” This is where a financial dashboard can prove to be an invaluable tool to help you plan and evaluate your personal retirement situation.
- Investing: Just under one-fifth of those surveyed had regrets related to investing. Some said they hadn’t invested their money at all, while a smaller group regretted having made bad investment decisions. The Motley Fool article warns, “If you’re not saving and investing for retirement – and doing it in earnest – you may be setting yourself up for a difficult future.” Almost 70 percent of respondents to the survey said Social Security benefits were critical to their retirement planning, but the average Social Security retirement income is only $17,000 annually, or less than $1,420 per month. Motley Fool advises that you need a “war chest for retirement” to build income through dividends, selling off shares, or purchasing an annuity.
- Borrowing: Ten percent cited a lifetime pattern of excessive debt as their biggest financial regret. “It may seem obvious to you that we should all avoid getting deep in debt,” says the Motley Fool “What isn’t obvious, though, is how easy it is to end up mired in debt.” Take credit card debt, for example: a $10,000 balance at 17 percent interest is costing you $1,700 in annual interest. But if you fall behind, many credit card companies will boost your rate to stratospheric levels, as high as a usurious 29 percent, costing you about $100 per month more in interest alone. Seniors burdened by credit card debt can find themselves deep in a financial hole without a clear way forward.
Plan Ahead and Minimize Those Financial Regrets
For those still many years away from retirement, the Motley Fool article brings timely advice. “If you can avoid having the above disappointments by the time you become a senior citizen, you’ll likely have set yourself up for a comfortable retirement. You may lament not having traveled to Europe, but your sizable nest egg might pay your way there. A little planning and perseverance now can minimize your future regrets and put you on solid financial footing.” As for the rest of us, there’s no time like the present to change course and start making more prudent decisions concerning saving, spending, investing and debt.
We have two suggestions. First, contact us and we’ll refer you to a trusted financial planner who will help you develop that all-important financial dashboard we mentioned above. Second, this is the perfect time to join Rajiv Nagaich at an AgingOptions LifePlanning Seminar where you’ll learn invaluable in formation about how to put all the pieces of your retirement plan together, including how to make sound financial decisions; how to evaluate your housing options; how to select the right health care coverage; how to adopt a solid legal strategy; and how to ensure that your family will advocate for your wishes as you age.
We offer free, information-packed LifePlanning Seminars in locations throughout the region. For a complete calendar along with simple online registration, visit our Live Events page or give us a call. Whether retirement is years away or you’re already retired – whether you feel well-prepared or overwhelmed – Rajiv has important and insightful answers for you. Age on!
(originally reported at www.fool.com)