Will your retirement regrets list be full of "I wish I would have...?" What if you could use regrets of other retirees to change or improve your current course?
Short Youtube Recap here: https://youtu.be/CiGxXeem2yI
Listening to the wisdom of those that have gone before you, can help you avoid their big mistakes and take advantage of financial opportunities you may have missed.
In our role as financial advisors, we have the unique opportunity of hearing a long list of retirement regrets. In listening to their perspectives, we gain an understanding of the path they took and the things they wish they could have done to prepare for retirement.
In this episode of the Financial Symmetry podcast with Chad Smith and Allison Berger, we break down the top retirement regrets that investors typically experience. Listen in so you can learn from others and ensure that you don’t make the same mistakes they did.
9 Avoidable Retirement Regrets
- I wish I had a detailed retirement plan. 3 out of 4 baby boomers don’t have a detailed retirement plan. Without a retirement plan, it makes it hard to anticipate what may come next. You'll need to consider those big purchases, how often will you buy cars, and if you are going to move. Life can feel much more uncertain in retirement, without the dependability of a steady income you’ve relied on your entire working life. Without a plan, opportunities could be passing you by each year.
- I wish I hadn’t planned to work so long. There are many people who plan to work until age 70, but due to unforeseen issues, they had to stop working before they were ready. Some had to stop due to family illness, layoffs, or forced early retirement. Whatever the reason, running what-if scenarios could leave you more prepared to face the unknown risks that are lurking.
- I wish I would have started saving in a tax-free account earlier. An often overlooked strategy while saving, is your lifetime tax rate. By focusing on tax-free savings, it creates flexibility for future retirement withdrawals. There are many that think they can’t take advantage of a Roth IRA due to having a high income, but there are options. Back-door Roths, after-tax 401k savings and HSA's all offer other opportunities. We've included past detailed episodes on all three in the links below.
- I wish I didn’t have such a big house. Many people become enamored with the idea of a mansion. So much that they sacrifice saving in retirement accounts. More expensive homes require more expensive upkeep. The social pressures in higher priced neighborhoods cause extra lifestyle creep. Years pass, and you realize savings isn't where you thought it would be. Once reaching retirement, downsizing becomes the new trend but moving is often delayed due to frustrations of moving and decluttering their homes.
- I wish I hadn’t worried so much about market drops. The idea that you could lose half of your savings is scary. There is always a reason you should not invest, but inflation is the silent killer that awaits you, if you don't. Finding the appropriate risk is vital to helping you sleep at night. Research shows a tremendous difference when missing the best days in the market. So while timing market drops is tempting, a buy and hold strategy with appropriate percentages of risk is your best bet.
- I wish I hadn’t counted on rental income. Be careful about counting on rental real estate if that is your plan. Assure you are factoring in all expenses to your calculation with forecasting returns on rental real estate. Appreciation rates will suffer, if proper maintenance is not kept up on properties. This could affect the long-term health of your financial plan.
- I wish I would have invested more in friendships. Think intentionally about how you will spend your time in retirement. Many people end up socially isolated in retirement. Retiring to something vs. from something can add to happiness levels and improve your odds of a successful retirement with less regret.
- I wish I hadn’t taken Social Security so early. Delaying Social Security can be a benefit in multiple ways. An alarming amount of people (57%) take Social Security before their full retirement age. This decreases the amount they could receive and provides more tax flexibility. Less guaranteed income, provides for more IRA/401k withdrawals at lower tax rates potentially. If you are married, you might also consider the survivor benefit element. Listen in to hear details of the benefits of delaying your Social Security.
- I wish I had had more experiences. Many wish they had traveled more while they were healthy or while their kids were still at home. Too many look back with the regret of waiting to late to travel.
Outline of This Episode
- [3:07] I wish I would have had a detailed plan earlier
- [5:06] I wish I hadn’t planned to work so long
- [7:07] I wish I would have started saving in a tax-free account earlier
- [10:30] I wish I didn’t have such a big house
- [12:47] I wish I hadn’t worried so much about market drops
- [17:45] I wish I hadn’t counted on rental income
- [20:33] I wish I would have invested more in friendships
- [22:45] I wish I hadn’t taken Social Security so early
- [26:00] I wish I had had more experiences
Resources & People Mentioned
The Financial Symmetry Podcast is an original podcast from Financial Symmetry in Raleigh, NC. To learn more about the show or the past 104 episodes, visit https://www.financialsymmetry.com/retirement-podcast/.
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