Is there a need to know how you can rescue your retirement? Well, a 2019 survey by Global Atlantic Financial Group, which sells annuities, asked more than 4,000 Americans, pre-retirees and retirees, about their retirement savings. Of those surveyed, 55% said they had regrets. The top three were that they:
- Did not save enough.
- Relied too much on Social Security.
- Did not pay down debt before retiring.
By taking steps now, let’s look at how you can rescue your retirement and avoid those major retirement regrets.
- Failing to save enough. A recent survey found that 62% of respondents were confident about their current financial health. However, when people looked ahead to their retirement finances, that changed. Part of the issue is planning. Only 18% of the Fidelity survey respondents had a financial plan for retirement. Without planning, it’s hard to know if you have enough saved. See how much you’ll be spending in retirement. Go through your expenses and increase your savings. The most common financial surprises for retirees are inflation and unexpected medical costs.
- Depending too much on Social Security. Rather than looking at Social Security as your main source of income in retirement, view it as one of several legs of a stool. Social Security isn’t designed to provide all the necessities of life. It is supplemental. It is not intended to be replacement income. Your planning should include other resources, including:
- Tax-advantaged retirement plans
- Taxable investment accounts
- Personal savings
- A health savings account
- Income from businesses or properties.
- Not paying off debt before you retire. For retirees on fixed incomes, debt makes it difficult to really enjoy retirement. Therefore, retire any debt you have before you stop working. You should systematically focus on one debt at a time, while making minimum payments on other debts. Get started by targeting the debt with the highest interest, or perhaps the one with the smallest balance. The goal is to be debt-free in retirement, so your financial resources can go toward helping you enjoy life. However, you shouldn’t concentrate too much on paying down debt and overlooking your retirement savings.
How you can rescue your retirement and avoid retirement regret is by planning. Start now and evaluate your situation. Then develop a retirement roadmap that helps you get from today to tomorrow. Speaking with a financial advisor to help start that retirement roadmap, if you don’t already have one, will lead you in the right direction. And Beck & Lenox emphasizes the importance of having a solid estate plan in place to protect what you have built for yourself and your family.
Reference: Money Talks News (Oct. 13, 2019) “The 3 Biggest Regrets of Retirees — and How to Avoid Them”