Although you may have a “do over” or two during your lifetime, retirement is not one of those moments, as it is a one-time deal. When retirees have been surveyed, they have regrets and would do things differently, if given the opportunity. Below are some common regrets honestly shared by retirees that non-retirees may find valuable.
- Stop working too early. Some people start counting the days until retirement as soon as they turn 50 years old. They are anxious to stop working and they may retire earlier than planned. This type of decision is usually emotionally and not logically based. The problem is that this decision will reduce the time you have to save money and also the amount of time you will need the money will increase.
- Cash out sooner than later. Tapping into social security funds before age 65 will result in smaller monthly checks. In addition, accessing a retirement account at the age of 59 ½ will have higher tax consequences than if you wait until age 65.
- Overspending. Many retirees spend a great deal of cash during the first few years. This is usually done because they want to enjoy their new found freedom while they are still healthy. The problem is that they do not plan accordingly and may find themselves short of funds to pay monthly expenses. Balance is the key to fully enjoying retirement.
- Relying on credit cards during their working years and losing sight of the benefit of saving. The role of thumb is that if you cannot pay off your credit card at the end of each month, then you should not be using a credit card to make more purchases. These debts do not magically disappear when a person retires, as they still need to be paid off (only now with a limited income).
Other regrets of retirees include, but are not limited to:
- More than 35% of retirees say that they would contribute more to a 401K (or other retirement fund) sooner than later.
- More than ten percent (10%) said that they would have sought the counsel of a professional financial advisor.
- Many retirees said that they would have taken better care of their health in their younger years.
- Another major regret is that while working so hard, they lost touch with friends and in their later years, they found that it was too late to rekindle lost friendships.
One of the top regrets is not having a financial plan in place and this should include an income and investment plan, as well as a tax and estate plan in place.