Retirement can be one of life’s most rewarding phases—but only if you’ve planned for it. According to the Medicare FAQ Survey (2024), 1 in 4 retired Americans says they regret not starting their financial planning earlier. And many say they would go back and make better choices if given the chance.
Why the Regret?
There are several key reasons behind these regrets:
- Underestimating future expenses and not saving enough early. People often underestimate how much they’ll need or overestimate how much time they have to save.
- Life events such as buying a home, raising children, or dealing with debt pushing retirement savings down the priority list.
- Many retirees are caught off guard by out-of-pocket medical expenses, which can erode savings faster than expected.
- Inflation significantly reducing the purchasing power of your savings.
- Missed opportunities for compound growth. Time is one of the most powerful tools in building a retirement nest egg. Thanks to compound interest, even modest savings can grow substantially. For example, if a 30-year-old invests $300 a month for 35 years with an average 7% return, they’ll have nearly $500,000 by age 65. If that same person waits until 45 to start saving, they’ll end up with just around $150,000.
- Over-reliance on Social Security or pensions that didn’t stretch far enough
- Having to delay retirement or cut back lifestyle expectations
Next Steps
What if you are near retirement and feel time is not on your side? This is not an uncommon feeling – you’re not alone. Even in this situation, there are concrete, effective steps you can still take to improve your financial readiness. Here are some of these steps:
1. Maximize Retirement Contributions
- Catch-Up Contributions: If you’re 50 or older, the IRS allows extra contributions:
- 401(k)/403(b)/TSP: $23,000 (2025 limit) + $7,500 catch-up = $30,500 total.
- IRA: $7,000 + $1,000 catch-up = $8,000 total.
- If your employer offers a match, ensure you’re at least contributing enough to capture the full match—this is “free money.”
- Consider Roth conversions if you expect to be in a higher tax bracket later.
2. Pay Down High-Interest Debt
- Prioritize paying off credit cards, personal loans, and high-rate car loans before retirement
- Keeping a manageable (or zero) debt load lowers the monthly income you’ll need once you stop working.
3. Re-Evaluate Spending & Lifestyle
- Build a retirement budget: Estimate expected income (pensions, Social Security, retirement accounts) and expenses (housing, healthcare, lifestyle).
- Trim discretionary spending now and channel those savings into your retirement accounts.
- Downsizing housing or relocating to a lower-cost area can free up significant cash.
4. Maximize Social Security Benefits
- Consider delaying claiming until age 70 increases your monthly benefit by about 8% per year after full retirement age.
- If possible, continue working longer (even part-time) to both delay Social Security and add to retirement savings.
5. Healthcare & Insurance Planning
- Healthcare is often the biggest late-stage cost. Make sure you:
- Understand Medicare enrollment windows and supplemental options.
- Consider long-term care insurance or alternative strategies if eligible.
- Review all insurance policies (life, disability, and homeowner) to ensure they match your current needs.
6. Investment Strategy Adjustment
- Review the impact of your current investments on your financial goals.
- Consider adjusting if not aligned.
7. Generate Supplemental Income
- Explore part-time or consulting work in retirement—it reduces the draw on savings and can bridge a shortfall.
- Consider monetizing skills, property (e.g., renting a room), or hobbies.
Work With Us
Planning doesn’t need to be perfect—it just needs to start. The best time to start was yesterday. The second-best time? Today.
At Purposeful Wealth Advisors, we understand the need for comprehensive retirement planning and will help you address the many components that impact a successful retirement. Contact us today to develop a strategic retirement plan that mitigates regret.
Keating Financial Advisory Services, Inc. is an SEC Registered Investment Advisor. Investment advisory services are offered only through a written agreement and are described in our Form ADV Part 2A. This content is for informational purposes only and does not constitute personalized investment advice. All investing involves risk, including the possible loss of principal.
