As a gift for years of hard work, retirement should be a time of rest and happiness. However, a lot of Americans who are beginning this stage of life are filled with regrets.
If you know about these common mistakes, you can make your way to retirement without worrying about “what ifs.”
Here are some of the most common worries people have about retirement and ways to avoid them.
1. Not Saving Enough: A Universal Regret
One of the things that seniors most often say they wish they had saved more is money. This is a bigger problem now than it was in 2025, when prices were higher and people lived longer.
A study from the Transamerica Center for Retirement Studies says that the average amount of money retired people have saved, excluding home equity, is only $71,000.
With this amount and the problems of inflation and rising health care costs, many seniors feel like they don’t have enough money to cover their needs.
Why It Happens
- Late Starts: Many people delay saving for retirement until their 40s or later. Women, in particular, often cite this as a regret, with 4 in 10 retired women saying they didn’t prioritize financial planning until their 40s or beyond.
- Lack of Awareness: Many retirees from older generations didn’t have access to resources like 401(k) plans, leaving them underprepared.
How to Avoid It
- Start Early: Begin saving in your 20s or as soon as possible. The power of compound interest cannot be overstated.
- Contribute Consistently: Aim to contribute the maximum allowed to retirement accounts like 401(k)s and IRAs.
- Automate Savings: Set up automatic transfers to retirement accounts to make saving a habit.
2. Tapping Social Security Too Early
Another big mistake people make is taking Social Security payments too early. Even though you can start getting benefits as early as age 62, the amount you get each month will permanently go down.
The Transamerica study says that the average age at which people start getting benefits is 63, and only 4% of retirees wait until they are 70, which is the oldest age they can be.
The Impact
Delaying Social Security benefits can increase your monthly checks by about 8% annually after your full retirement age, up to age 70. This delay can mean a substantial boost in income over the course of your retirement.
How to Avoid It
- Plan Ahead: Use retirement calculators to estimate your Social Security benefits at different ages.
- Delay If Possible: If you’re in good health and can afford to wait, consider delaying benefits to maximize your income.
- Create a Bridge Fund: Use savings or other income sources to bridge the gap if you delay claiming benefits.
Also Read: Why You Should Start Claiming Social Security Benefits Early
3. Retiring with Too Much Debt
In retirement, debt can be a big problem. The Employee Benefit Research Institute says that almost seven in ten retirees still have credit card debt.
Over the years, this problem has gotten worse as more and more seniors use credit cards to pay for things.
Why It Happens
- Lack of Budgeting: Many retirees underestimate post-retirement expenses.
- Healthcare Costs: Unexpected medical bills can lead to significant debt.
- Inflation: Rising costs outpace savings, pushing retirees to rely on credit.
How to Avoid It
- Pay Down Debt Early: Focus on paying off high-interest debt like credit cards and personal loans before retiring.
- Budget Wisely: Create a realistic retirement budget that accounts for inflation and healthcare costs.
- Consider Downsizing: Selling a larger home for a smaller, more affordable property can reduce mortgage and maintenance costs.
4. Poor Timing of Retirement
When you leave is very important to how happy you are with your life. About 60% of retirees leave their jobs before they meant to, usually because of health problems, changes at work, or having to take care of someone. But retiring faster than planned can put a strain on your finances.
The Financial Upside of Working Longer
- Additional Earnings: Extending your career allows you to save more and avoid dipping into retirement accounts.
- Social Security Benefits: Delaying retirement means higher Social Security payments.
- Health Insurance: Working longer can provide continued access to employer-sponsored health plans.
How to Avoid Regret
- Have a Backup Plan: Prepare for unexpected early retirement by building an emergency fund.
- Stay Flexible: Consider part-time work or consulting if full-time employment isn’t feasible.
- Focus on Health: Invest in your health to reduce the likelihood of medical issues forcing early retirement.
5. Neglecting Emotional and Lifestyle Planning
Financial preparation is crucial, but emotional readiness is equally important. Many retirees regret not planning for how they would spend their time, leading to boredom and a loss of purpose.
Questions like “What will I do every day?” or “How will I stay connected to others?” often go unanswered.
Why It Matters
- Retirement is a significant lifestyle change. Without a clear plan, retirees can feel isolated or unproductive.
How to Avoid It
- Set Goals: Identify hobbies, interests, and activities to pursue in retirement.
- Stay Connected: Build and maintain social relationships through clubs, volunteering, or community activities.
- Find Purpose: Consider mentoring, teaching, or starting a small business to stay engaged.
Lessons from Retirees: Hope for the Future
Despite these regrets, most retirees report satisfaction with their lives. Over 40% say their happiness and enjoyment of life have improved since leaving the workforce.
Retired women, in particular, often rate their financial health more positively than those still working, suggesting that careful planning and adjustments can lead to a fulfilling retirement.
Key Takeaways
- Retirement is Personal: Everyone’s path to retirement is unique. Tailor your plan to fit your goals and circumstances.
- Start Now: It’s never too early—or too late—to begin planning for retirement.
2025: A New Year, A New Plan
If you’re approaching retirement, make 2025 the year of proactive financial and lifestyle planning. Here are some actionable steps:
- Create a Written Plan: Include your income, expenses, savings, and investments.
- Balance Your Portfolio: Diversify between stocks, bonds, and cash to manage risk.
- Review Healthcare Options: Factor in Medicare, supplemental insurance, and long-term care.
- Plan for Inflation: Adjust your budget to account for potential cost-of-living increases.
By addressing these common regrets now, you can pave the way for a retirement free of financial stress and full of meaningful experiences. Let 2025 be the year you take control of your future and build a retirement life without regrets.