MY PLAN IQ

9 Lessons From Retirees' Biggest Retirement Regrets!

Business Insider recently surveyed over 3,300 older Americans that revealed common retirement regrets. Drawing from this survey and additional insights elsewhere, we've identified the top 9 lessons younger Americans can use to improve their retirement planning:

The number one regret among these retirees, as many might have guessed, is not starting to save and invest early! This basically aligns with the core message of this newsletter.

Here are the top lessons:

1. Start Saving and Investing Early
   • Begin saving in your early 20s or even in college, even if contributions are small.
   • Contribute enough to employer-sponsored retirement plans to receive the full match and increase savings as your salary grows.
   • For those without workplace plans, consider IRAs (Traditional or Roth). Solo 401(k) and SEP IRA are often ignored by self-employed. 
   • Investing early allows you to capitalize on compound interest and reduce reliance on Social Security.
2. Diversify Retirement Accounts and Investments
   • Open brokerage accounts to start investing with minimal barriers.
   • Explore Roth 401(k)s if you anticipate being in a higher tax bracket later in life.
3. Avoid Over-Reliance on Social Security
   • Relying solely on Social Security can lead to financial constraints later in life.
   • Delay claiming Social Security benefits until full retirement age (67) to maximize payouts.
4. Plan for Major Life Events (Divorce or Spouse’s Death)
   • Married couples should align their retirement goals and analyze finances as a household.
   • Protect assets with prenuptial agreements and consider trusts for wealth preservation.
   • Ensure there’s a will and life insurance policy to secure assets and income in the event of a spouse’s death.
5. Build a Robust Emergency Fund
   • Save three to six months’ worth of expenses as a safety net; increase this to one to two years as retirement nears.
   • Be prepared for unexpected expenses, such as medical emergencies, layoffs, or natural disasters like the recent wildfire tragedy in Los Angeles!
6. Factor Healthcare Costs into Planning
   • Regularly research and evaluate insurance options to minimize out-of-pocket expenses.
   • Factor in long-term care cost that will be needed at some point!
7. Utilize Government Assistance and Benefits
   • Consult benefits counselors to determine eligibility and conserve personal savings.
   • Investigate programs like SNAP or Medicaid for potential financial support.
8. Balance Saving and Enjoying Life
   • Avoid regrets of over-saving by maintaining a balance between preparing for retirement and enjoying the present.
   • It's all about balance: fulfilling experiences while securing your financial future.
9. Seek Professional Financial Advice
   • Even if you're financially savvy, advice and guidance from a professional serve as a valuable second opinion and a regular reminder to help you stay on course!