In a survey by the National Association of Area Agencies on Aging, the National Council on Aging, UnitedHealthcare, and USA TODAY, researchers found that the number one regret individuals over 60 had when looking back on their lives was not having saved enough money. Of the 1,000 adults surveyed, 45% wished they had saved more, followed by 36% wishing they had taken better care of their health, and 31% wishing they had made better investments. Those who felt they were confident in their ability to maintain a high quality of living listed having the support of friends and family, being happy about their living situation, being well-prepared financially, and being in good health as the top reasons for their optimism (you can find the USA Today article here). As a generation of baby boomers reaches retirement age, many individuals are having to face the consequences of the choices they made during their working years and for some, they wish they had done things differently.
While different sources quote different numbers, what’s common among the headlines when you google “average savings for retirement” is a severe lack of savings. In an article released by Investopedia in late July, the estimated median savings for someone in their 60s was $172,000. Of course, you could argue that this doesn’t include help from social security, but when you consider the fact that the average retiree received $1,342 in monthly benefits as of December 2015, the likelihood that you can live solely off of Social Security, particularly if you live in an expensive part of the country is low.
If you find yourself identifying with some of the regrets listed previously, it may be time to rethink your approach to saving for retirement. While this may certainly feel like a monumental task, it isn’t impossible. Last year, we wrote an article about the concept of saving more in the future (you can find that article here). The concept is simple: set yourself up to save future bonuses and raises thereby automatically saving more in the future without causing too much pain to your current lifestyle. If you believe that might not be enough, then it may be time to take stock of what you’re spending and consider what you can eliminate to help free up some of your budget to save more. Finally, if you’re not sure whether or not you’re on track, you may want to consider meeting with an advisor and having a personalized financial plan built. Here at Cedarstone, we believe that good planning lies at the core of financial freedom. It’s why we offer all of our financial plans completely free of charge – because we believe it’s the right thing to do. If you’d like to retire with fewer regrets, please give us a call today. We’re happy to help.
“Fact Sheet.” Social Security. December 2015. https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
Jayson, Sharon. “Survey shows life regrets can shape later years.” USA Today. July 16, 2014. http://www.usatoday.com/story/news/nation/2014/07/15/aging-survey-second-chances/11892081/.
Parker, Tim. “The Average Retirement Savings by Age for 2016.” Investopedia. July 20, 2016. http://www.investopedia.com/articles/personal-finance/011216/average-retirement-savings-age-2016.asp.