Life is not without regrets. We all have them. Often the biggest regrets in our life aren’t typically about the things we did do; it’s about the things we failed to do. The question is … what can you learn from other’s people’s regrets when it comes to planning for your retirement? The answer is plenty. Knowing these things and learning to avoid them could save your retirement!
If you’re recently retired, or within 5 years of retiring, you now have an entirely new set of challenges facing you in retirement versus the people who retired long before you. However some of the fundamentals of retirement have remained the same. There is a lot you can learn from their mistakes and the regrets they have about their own retirements.
There are few times in life where you get a “mulligan” – when you get a 2nd chance. And retirement’s definitely not one of them. The choices you make today will make a tremendous impact on the next 20, 30, possibly even 40 years of your life.
You don’t want to look back 30 years from now saying “I should’ve done this!” Or “I should’ve done that.” At that point it’s far too late.
There are 7 common retirement regrets we hear from clients. You should know these so you can prevent yourself from making any of these same mistakes and in turn, enjoy a successful and more comfortable retirement.
I Didn’t Save Enough for Retirement or Spent Too Much
The biggest regret that we see and hear from a number of people is that they did not save enough. Americans do everything backwards, they get their bills paid and they forget to pay themselves. And so many people just haven’t saved enough over the course of their life. So they wake up and they say “how am I going to replace that 50, 60, 70 or 80 grand a year income during retirement?” How much money is that going to take and how long is that going to last me?
If you’re woefully behind in retirement savings, it’s going to be a big task to make up ground. Thankfully there are some strategies you can employ. Namely hitting contribution limits in your 401(k) or IRA, which increase after age 50.
USA Today: Retirement Living: Biggest Retirement Regrets Click Here
You also have to look at your spending and your lifestyle. We could survive on a lot less. That’s a part of our culture. America is a marketing machine. There are thousands of marketing messages that flash before our eyes each and every day. We have many opportunities to spend our money. The truth is we’ve gotten spoiled in America. We are used to having a lot of material possessions! As you look at the cost of things and how it adds up over the course of the week, it’s insane! Put simply, you need to make a decision between living great now and poor later, or living responsibly in anticipation of a long retirement.
I Wasn’t Savvy About Reducing my Taxes
Another one is not taking advantage of every tax advantage that you possibly can. Most Americans are paying more in taxes than they should. Because they’ve made the tax laws so complicated, people don’t want to take the time and hire the right professional to help them reduce their taxes legally.
MarketWatch: Overcoming Retirement Regrets Click Here
Premature IRA withdrawals and or botching on Roth IRA rollout strategies can affect your tax picture. It is our viewpoint that you should not be taking money out of those accounts at an early age. We’ve seen so many people who have done this and it’s devastating because when they receive the tax bill next April, their withdrawals have been added to their taxable income. It’s just a snowball going the wrong way.
I Retired Too Early
Another mistake is retiring too early. Many don’t realize that by retiring early, you are requiring your nest egg to stretch even further. Retirement is already a marathon that could last as long as 30 or 40 years! Even if you retire after age 65, retirement requires discipline and a water tight plan for generating consistent income you cannot outlive. Many regret retiring early and burning through their money too quickly.
I Didn’t Diversify Properly
When you have money invested in the wrong type of retirement accounts that can be an issue. For example those people who have all their money invested into the market in 2001 or 2008.
The market is a great place to be when the market is going up but not so great when the market is going down. Millions of people have seen their retirement accounts cut in half. It’s devastating when you’re retired and you’re taking money out of a depleting asset, this is considered “reverse dollar cost averaging” and it can eat away your retirement savings quickly.
I Expected Social Security to Take Care of Me
Many expect Social Security to take care of them financially. The truth is Social Security was never designed to be exclusively responsible for creating your paycheck in retirement. It was designed to be a supplement in addition to your own personal savings and investments.
Yahoo Finance: What Have I Done? Baby Boomers Reveal Their Deepest Financial Regrets Click Here
I Didn’t Have a Spending Plan
Not having a spending plan is another big regret. It amazes us how many people don’t have one. This often means they don’t even know where their money is going. Many folks find their budgets lacking at the end of the month because they spent too much at the beginning. That’s a big issue.
I Had Too Much Debt
Debt is the devil and you have to treat it like that. You can’t create wealth until you eliminate debt. Many folks live above their means and pay for it because they have a bunch of debt.
The best way to make sure you don’t have any of these same retirement regrets is to work with a retirement coach who can help you have the discipline to stick with a plan. Without the proper road map guiding you to your destination, any road will get you there, because you don’t have a destination. If you don’t have a plan, you’ll stumble through life and could eventually have one of these same retirement regrets.
Business Insider: Baby Boomers Share Their Biggest Regrets Click Here
We encourage you to come in and sit down with us. Talk with us and we can lay out a plan designed to get you through retirement without any regrets.