1,200 baby boomers told us what they regret about investing for retirement

By Investor Empires On Nov 23, 2024

Millions of Americans facing retirement worry that they will never be there Financially prepared – Or fear that they will have to work forever.

Some of them already exist. Finances and retirement were top topics in nearly 1,200 responses Business Insider received from Americans ages 48 to 90 who filled out a voluntary survey about their lives. Biggest regret. (This is part two of an ongoing series.)

Retirement – how to invest and how much one needs – is a black box for many. Some want to hire a financial advisor, while others regret expensive purchases. Others said they took Social Security too early or retired without a long-term financial plan.

Then there are those who have suffered an unexpected setback such as a cancer diagnosis, job loss, or… Divorce I hope they are better prepared for emergencies.

Gary Lee Hayes, 70, wished he was more strict with his savings Investments. The California resident served briefly in the Navy, earned a degree in public administration, and worked in mental health and craft jobs. He had little financial knowledge growing up and said he did not focus on building his career to be more profitable.

Two of Hayes’ major regrets are not investing in Verizon stock early and not saving at least 10% of his income each month. He also said that he had been fairly liberal with his spending throughout his life, although he said he had never bought anything beyond his means. He also avoided putting money into his 401(k) and said he should have chosen more stable investments instead of short-term ones.

“You can’t expect that all of a sudden you’re going to win the lottery,” said Hayes, who receives $1,846 a month from Social Security and lives in government-subsidized housing. “You can’t expect someone to pass by and leave you an inheritance that will make your life more comfortable.”

A major theme among BI survey respondents was that they lack knowledge about investing. For some, this meant not saving enough; For others, it meant making some common investing mistakes.

New research from Vanguard suggests that people who change jobs are investing less in their 401(k), often without realizing it, and could be losing money. Up to $300,000 Throughout their career.

Another theme among survey respondents was that they waited too long to start saving. Two separate surveys from Transamerica Institute and Charles Schwab I found that on average, Wait for the baby boomers until Age 35 To start saving.

Nancy Seager, 64, who lives outside Cleveland, said she did Investment Mistakes that had long-term repercussions on their finances. Seeger, who holds two master’s degrees, worked for many years as an educator and health librarian. She was laid off earlier this year from her $74,000-a-year job, and although she’s not ready to fully retire and is still looking for work, she’s worried she won’t be able to get another decent-paying job due to… For her age.

She told BI she wished she could have saved more when her children were young and started her retirement funds early. While she had some savings, she began steadily putting more into her investments at age 50.

She also did not realize that she would be affected because she received a pension in addition to receiving Social Security when she retired. Unknown Social Security item That would reduce her monthly check. Between her pension of $713 a month and Social Security, which she expects to be between $1,200 and $1,400 a month, she will have enough to cover her rent.

“I was lucky to get a small inheritance from my father and aunt, which saved me, but it’s unlikely I’ll be able to do the same for my children, and that bothers me a lot,” Seager said. “I wanted to travel, and I wanted to leave money for my children, but those two goals have now been jeopardized.”

Seeger said she has no regrets and “let life come to me,” though she plans to get a part-time job when she retires to supplement her income. She’s still racking up bills for her cancer treatment in 2022, and because she has a few months until she turns 65, she can’t get Medicare and has to pay for her health insurance out of pocket.

“A lot of unexpected things have happened to me, but I also realized that unexpected things affect everyone, and you can’t really plan for them,” Seager said.

While $1 million for retirement may be enough for some Americans, it may be too little for others.

Bank of America Track financial wellness It suggests that Americans ages 61 to 64 should have savings of about 8.5 times their current salary. A person with $1 million in savings at age 65 can safely withdraw $40,000 in the first year of retirement, Bank of America said.

For some, saving just 1% can have big financial rewards in the future. If someone making $50,000 a year contributes 5% of their salary for retirement, they will save nearly $60,000 more after 30 years than if they contributed 6%.

Calculating how much you need to retire requires difficult estimates of life expectancy, retirement spending, and retirement resources, Nevenka Vrdoljak, a managing director in the chief investment office of Merrill and Private Bank of America, told BI.

“Changes in government benefits can affect expected income,” Vrdolyak said. “Fluctuations in investment returns make it difficult to estimate how much savings you will have in the future.”

With cancer rates to rise The diagnosis comes early in life, and another difficult calculation is how to prepare for time off work and quickly mounting medical bills.

“The need for long-term care can cause more than just financial stress in retirement. It can put a burden on loved ones,” Vrdolyak said. “Investors with large assets may prefer to self-insure against these risks. But for many other investors approaching retirement, long-term care insurance can help mitigate the risks and cost of care.”

PJ White, 69, had no aspirations for a high-paying job, but she never expected to become homeless.

Throughout her career, she has worked in laboratory supply companies, retail companies, and as a secretary in law firms. She married at 21 and bought a house, but divorced a year later, crippling her financially.

Although she said she often lived a good life, she wished she had been more careful about spending on leisure time and clothing — what she called “play money” — and taking the time to learn about investing. She said she rarely had savings left over each month, and her maximum income was about $41,000. She left work in 2008 to care for her partner’s mother.

“Money was coming in and going out,” White said, adding that she rarely put money into her 401(k) retirement fund. “I didn’t think about the retirement aspect because it was so far away, but now I wish it were possible.”

She recently lost her home because she and her partner couldn’t pay the property taxes. They now live in Camping tent In San Diego. She lives on about $1,500 Social security Every month they fight to get their home back, but she said a lot of her money goes toward court fees. She has received some help with grocery shopping through her new health insurance company, but has not yet secured an affordable housing unit.

“He’s not making any money at all, so it’s all on me, and I feel like that,” White said of her partner. “I am showing symptoms of stress, and I have nowhere to go and no one to turn to.”

Are you an older American with regrets about your life that you would feel comfortable sharing with a reporter? Please fill this out Fast format Or email nsheidlower@businessinsider.com.

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