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    Home»Finance»10 Biggest Money Regrets of Retirees, According to Financial Experts
    Finance

    10 Biggest Money Regrets of Retirees, According to Financial Experts

    August 24, 20246 Mins Read


    wavebreakmedia / Shutterstock.com

    wavebreakmedia / Shutterstock.com

    When you picture your retirement, you probably envision days filled with fun and void of worry. Unfortunately, with more than half of Americans saying they might not have saved enough for retirement, too often our golden years are woefully low on gold.

    Explore More: 8 Myths About Debt That Boomers Must Stop Believing Before They Retire

    Check Out: 7 Common Debt Scenarios That Could Impact Your Retirement — and How To Handle Them

    To help you avoid the same fate, find out what retirement planning experts said retirees’ biggest regrets are — this way you can grow your wealth instead.

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    1. Not Prioritizing Savings in the Early Years

    Let’s face it, saving is tough when you’re in your twenties and thirties. Whether it’s fun with your friends or starting a family, saving is often last on the list of priorities. But that’s one of the regrets most often voiced by retirees, said Ryan Marshall, vice president and financial advisor at Wealth Enhancement Group: “Retirees often regret not investing early enough to take advantage of the compounding effect of growth in their tax-deferred retirement vehicles. This can come from not contributing enough to an IRA or company-sponsored retirement plan, or from inappropriate asset allocation decisions at a younger age.”

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    2. Overlooking Tax Consequences

    No one likes taxes, especially when they unexpectedly take a chunk out of your retirement savings. So, planning for taxes, and how to mitigate them, should be high on your retirement checklist, said Devin Carroll, owner and lead advisor at Carroll Advisory Group, which specializes in retirement planning. Retirees often regret not understanding how taxes would affect the money they withdraw from retirement accounts, leading to bigger tax bills than expected. For instance, said Carroll, some retirees regret not putting more money into tax-free accounts like Roth 401(k)s and Roth IRAs. “These accounts can give them more options in retirement and help reduce the taxes they pay,” he said.

    3. Not Paying Off Debt Before Retiring

    Unfortunately, there’s nothing more American than debt. It’s how we buy homes, cars, college degrees and big TVs. But do yourself a favor and pay off as much of it as possible before retiring, said Michael Collins, CFA, founder and CEO at WinCap Financial. “Retirees who enter retirement with significant debt often regret not paying it off earlier, as debt payments can eat into their limited retirement income and add stress to their financial situation.”

    4. Underestimating Healthcare Costs

    Unfortunately, humans do not generally get healthier with age, and so healthcare costs tend to rise with age, said Dennis Shirshikov, adjunct professor of economics at the City University of New York and head of growth at Summer. “Many retirees regret not planning adequately for healthcare expenses, which can be a significant financial burden in retirement,” he said. “Consider purchasing long-term care insurance while you’re still young and healthy enough to qualify for lower premiums. Additionally, build a dedicated healthcare savings account, such as a Health Savings Account, if available, to cover future medical expenses.

    And if you are already retired, Shirshikov suggested exploring supplemental insurance options like Medigap.

    5. Disregarding Investment Fees

    Fees can often be a hidden cost of investing — a cost which is easy to miss during your busy work and family life. But they can add up, Carroll said: “Fees can eat away at your savings. Retirees often regret not paying closer attention to the fees they paid for investments or financial advice, especially if they didn’t get enough value in return.”

    6. Panicking When the Market Drops

    When it comes to many things in life, panic does not result in wise decisions. That goes double for retirement investing, said Carroll.

    “Some retirees regret selling their investments when the market took a downturn because they were scared,” he said. “In hindsight, they see that staying invested would have been a smarter move.”

    This is another reason for investing early. It makes it much easier to benefit from the long-term rise in the market and disregard dips along the way.

    7. Claiming Social Security Too Early

    Because Social Security payments increase the longer you wait to begin claiming them, part of a solid retirement plan is optimizing when to access your benefits.

    “Many retirees wish they had waited longer to claim Social Security benefits,” Carroll said. “Claiming too early means getting smaller monthly checks for the rest of their lives.”

    8. Spending Too Much Early in Retirement

    For many, retirement is an exciting period in life, when they get more time to do the things they’ve always wanted to. But that exuberance can result in spending beyond your means, explained Carroll.

    “Some retirees spend too much in the first few years of retirement and later regret it when they have less money left to live on,” he said. He added that with life expectancies getting higher, it can result in serious monetary shortfalls late in life.

    9. Putting Their Children’s Needs First

    Children are expensive. And, often, being a good parent can be really expensive. You want the best for your kids, and it’s difficult not to prioritize their needs above your own. But, said Collins, many retirees he’s worked with express a regret that they didn’t do a better job of balance in this area. “Some retirees regret putting their children’s financial needs above their own retirement savings goals, ultimately leaving them with less money in retirement,” he said.

    10. Borrowing From 401(k) or IRA Accounts

    Whether it’s for a long-held goal or an unforeseen emergency, borrowing from a 401(k) or IRA account can seem like a wise or needed move at the time. But Collins said that retirees often need to express their regret at not trying harder to find another solution. “This may seem like an easy solution in times of financial need, but it can significantly impact the growth potential of these accounts and result in taxes and penalties upon withdrawal,” he said.

    More From GOBankingRates

    This article originally appeared on GOBankingRates.com: 10 Biggest Money Regrets of Retirees, According to Financial Experts



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