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Financial Regrets of Plan Participants

Seventeen percent of plan participants wish they had taken on more risk in investments prior to the recession, while 9 percent wish they had been more conservative. 

| BY Kent McDill

A person with a retirement plan clearly has some thought about the future, but apparently that person might also have some regrets about what he or she might have done differently in the past.

Spectrem’s Millionaire Corner study Attitudes of Retirement Plan Participants allowed investors to discuss their regrets related to the financial crisis that hit in 2008 and found that many retirement plan participants wish they would have made different financial decisions.

But regrets are not for everybody. Fourteen percent of plan participants said they had no regrets about their financial decisions prior to the economic downturn six years ago.

Obviously, retirement plan participants are already putting some money away for their post-work life, but for many, it is not enough. Sixty-eight percent of retirement plan participants say they wish they had saved more before the financial crisis, which had an effect on retirement plan balances.

Eighty percent of investors under the age of 36 said they wished they had saved more, and 74 percent of females felt that way.

The regret about saving more is pervasive. Fifty-four percent of plan participants with more than $100,000 in their account balances wish they had saved more. Among wealth segments, 61 percent of investors over the age of 60 wish they had put more away.   

RELATED: The Personal Financial Concerns of Plan Participants

Almost a third of retirement plan participants said they wished they had not taken on as much debt as they did. Prior to the financial crisis, debt rose as credit was easy to acquire, and when the door shut on the country’s finances, debt became a crisis for most investors. Forty-five percent of the youngest investors under the age of 36 said they wished they had avoided taking on debt.

Exactly one quarter of investors wish they had put more money away in their 401(k) accounts, which relates to their desire to have saved more money for the future.

Almost two-thirds of plan participants do not use a financial advisor of any sort, a remarkably high percentage. It’s revealing then that 24 percent of plan participants wish they had done more research about finances on their own, when such research could have been done for them by advisors.

While just over one-third of plan participants use a financial advisor, 18 percent said they wish they had taken greater advantage of their financial advisor’s expertise prior to the financial crisis. Financial advisors were not infallible prior to the crash but in many cases could have helped build a cushion or provided a swifter response to the economic downturn when it happened.

It is also revealing that 17 percent of plan participants said they wished they had taken more risk with their investments prior to the crash. Only 30 percent of plan participants say they are willing to take a significant risk on investments in hopes of gaining a high rate of return, so they tend to be a cautious lot overall.

On the other side of the risk picture, then, are the 9 percent of plan participants who say they wish they had invested more conservatively prior to the economic downturn. 

An investment that seems to have consistent appeal is real estate, a commodity that will never have greater supply. Twelve percent of investors said they wish they had invested in more real estate or real estate products prior to the crash.

Investments can take many forms, and 7 percent of plan participants said they wished they had invested more in themselves in the form of additional education or job training.



About the Author


Kent McDill

kmcdill@spectrem.com

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.

 


 

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