Americans rank “not saving enough for retirement” as their top regret, according to a new survey by Millionaire Corner. Learn how a Certified Financial Planner or other financial professional can help.
Americans’ biggest financial regret by far is not saving enough for retirement, according to a new survey by Millionaire Corner, a regret that the Certified Financial Planner Board and other advocacy groups would like to eliminate.
“Saving for retirement isn’t what it used to be,” according to a statement from the Certified Financial Planner Board. “The metaphor of retirement as a three-legged stool – supported by a pension, savings and Social Security – is no longer adequate for lifelong financial stability. Like everything else in our increasingly complex economy, preparing for retirement is, well, complex.”
Complicating this picture is the tendency of investors to begin worrying about retirement late in the game, according to Millionaire Corner research. A survey of 1,400 investors conducted in May finds that “not saving enough for retirement” is the top financial regret of investors in their 40s and 50s. But, investors age 40 and younger identify their top regrets as having too much credit card debt and spending too much money on material possession.
Our research shows that “not saving enough for retirement” ranks third among financial regrets for generations X and Y, but according to the Certified Financial Planner Board and other groups, young investors have the most to gain from establishing retirement accounts. IRAs and employer-sponsored plans, such as 401(k)s, offer tax advantages, including tax-free compounding of investment gains, and 401(k)s can provide matching funds from an employer.
“The younger you are when you start contributing, the more you will accumulate,” according to the Certified Financial Planner Board. “You may want to consider seeking help from a financial planner. Remember: inadequate savings can lead to financial crisis later in life.”
Experts estimate that retirees will need about 70 percent of their pre-retirement income to maintain their standard of living, according to the U.S. Department of Labor or DOL. Lower income earners may need 90 percent or more of their current income. Chances are, these retirement savings will have to last longer because the average life expectancy of Americans is increasing, and many retirees will live into their 80s and 80s, said the DOL, which urges workers to “Start saving, keep saving, and stick to your goals.”
Financial professionals, such as a certified financial planner, can help take some of the mystery out of retirement planning. The process begins by determining how much money will be needed to live comfortably in retirement, then calculating how much to save every year to reach this goal, according to the Certified Financial Planner Board, which advises, “The earlier you begin saving for retirement the better.”