Retirement is a looming concern for millions of Americans who worry they might not be financially ready, or fear they could end up working indefinitely.
Many people find themselves already grappling with the harsh reality. When Business Insider conducted a voluntary survey asking Americans aged 48 to 90 about their biggest regrets, retirement and finances emerged as prime areas of concern. From the responses of approximately 1,200 participants, some, especially those from the baby boomer generation, shared that planning for retirement feels like navigating a complex puzzle. Some wish they had sought advice from financial experts, while others lament past splurges. Several respondents admitted they tapped into Social Security too soon or retired without a concrete financial strategy.
Some folks experienced unexpected life events such as a cancer diagnosis, job loss, or divorce, leaving them wishing they’d been better prepared for such emergencies.
Take Gary Lee Hayes, for example. At 70, he reflects on his financial journey with some regret. Living in California, he dabbled in various careers—from a stint in the Navy to earning a degree in public administration, and later working in mental health and as a handyman. Lacking formal financial education during his upbringing, Hayes now acknowledges he didn’t emphasize building a lucrative career. Two standout regrets for him are missing the boat on early investments in Verizon stock and not putting away 10% of his income regularly. Over the years, he also admits to being a bit too loose with his spending habits, although never extravagantly. Keenly, he bypassed opportunities to grow his 401(k), often opting for short-term investments rather than stable ones.
“You can’t bank on winning the lottery suddenly,” Hayes remarked. His current monthly Social Security assistance is $1,846, and he resides in government-supported housing. “Nor should you hope for a generous inheritance to ease your life.”
A recurring theme among survey respondents was a lack of investing knowledge. Some didn’t save adequately, while others made common investment missteps.
Research from Vanguard highlights how people changing jobs often cut back on 401(k) contributions, potentially losing out on up to $300,000 throughout their careers. Another common regret was starting to save too late. Surveys from Transamerica Institute and Charles Schwab reveal that many boomers didn’t begin saving until the age of 35.
Nancy Seeger, who resides near Cleveland, recounted how some investing missteps have taken a toll on her long-term finances. With two master’s degrees under her belt, she thrived as a teacher and health librarian. However, a recent layoff from her $74,000 salary position has left her worried about finding similar work due to her age.
“When my kids were little, I wish I had saved more and kicked off retirement savings earlier,” Seeger shared. Despite having some savings, she committed to investing consistently only at age 50. She wasn’t aware that her pension, combined with Social Security, would reduce her expected monthly payout. Her retirement income, including a $713 pension and estimated up to $1,400 Social Security, would barely cover rent.
“A small inheritance from my parents and an aunt helped significantly,” she admits. “I had hoped to travel and leave something for my children, but those dreams are now compromised.”
Seeger has few regrets, saying she let life unfold as it may. To augment her income, she’s considering part-time work post-retirement. Currently, she’s dealing with medical expenses from cancer treatments in 2022, and without Medicare, she’s covering health insurance costs out of pocket until she turns 65.
“Life threw me some curveballs, but I’ve realized we all face unexpected challenges,” Seeger concluded. “You just can’t plan for everything.”
While having $1 million saved might suffice for some retirees, it might be insufficient for others. Bank of America, through its Financial Wellness Tracker, advises that individuals aged 61-64 should ideally aim for savings worth 8.5 times their annual income. It suggests that someone with $1 million at age 65 could safely withdraw about $40,000 in their initial retirement year. Even small increases in savings percentages can have substantial impacts over time. For instance, if a person earning $50,000 annually boosts their retirement savings from 5% to 6%, they could accumulate nearly $60,000 more over 30 years.
Nevenka Vrdoljak, leading the chief investment office for Merrill and Bank of America Private Bank, points out that estimating retirement necessities involves predicting variables like lifespan, spending habits, and income resources in retirement.
“Adjustments to government benefits can alter income expectations,” Vrdoljak notes. “Unpredictable investment returns also pose challenges in projecting future savings.”
Cancer rates are increasing, and diagnoses are occurring at younger ages, adding another layer of complexity in planning for work absences and soaring medical bills.
“The burden of long-term care extends beyond finances in retirement and can strain relationships,” Vrdoljak adds. “Those with substantial assets might opt for self-insurance, but long-term-care insurance could be beneficial for many nearing retirement.”
Consider the story of PJ White, now 69, who never aspired to high earnings but never anticipated facing homelessness. Her career spanned lab supply companies, retail roles, and various secretarial jobs at law firms. Marrying at 21 and purchasing a home early on seemed promising, but a divorce a year later disrupted her financial stability.
Living paycheck-to-paycheck was the norm, yet she wishes she’d been wiser with spending on leisure and clothes—what she refers to as “play money”—and educated herself on investments. Savings were often scarce, and her peak salary was about $41,000. She left work in 2008 to care for her partner’s ailing mother.
“Money came, and it went,” White shared, noting her rare 401(k) contributions. “Retirement seemed distant, but I sure wish I’d paid more attention back then.”
White recently lost her home due to unpaid property taxes, forcing her and her partner into a tent in San Diego. Her monthly Social Security of about $1,500 predominantly funnels into court fees as they battle to regain their house. Her health insurance company has given some assistance with groceries, yet securing affordable housing remains elusive.
“My partner earns nothing, leaving everything up to me, and it’s overwhelming,” White said. “I’m stressed and feel lost, with nowhere and no one to turn to.”
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