Looking back on our life choices, it’s sometimes easy to beat ourselves up over them. We recently polled AMAC members aged 70 and over and asked them what their biggest financial regrets are, Here’s what they told us.
“I should have saved more money for retirement.”
We were surprised to learn that more than half the people surveyed regretted not saving more while they were working. But studies show that many American families have little to no savings. In hindsight, the fix is simple –It’s never too late to create a rainy-day fund.
If you have a 401(K) opportunity through your employer, take advantage of it. And if your employer matches your contributions, then contribute at least the maximum amount they are willing to match. Your 401(K) is a great steppingstone toward retirement but won’t solve all your problems.
“I wish I had purchased more insurance.”
One important type of insurance that is often overlooked by many maturing Americans is Long-Term Care Insurance (or LTC). LTC insurance is critical because Medicare does not cover services related to this type of care such supervision and help with activities of daily living. But a long-term care policy can be costly, and if you don’t use it, you lose it.
An alternative option for planning for long term care is by purchasing a Permanent Life insurance policy with a Long-Term Care rider. This allows you to use the death benefit of the policy during your lifetime to cover various expenses, including those associated with in-house or nursing home care. At the time of your passing, the remainder of the policy will leave a death benefit to your loved ones.
“I wouldn’t have retired so early.”
As of the third quarter of 2020, 28.6 million Boomers said they were now out of the workforce. But the reality is that after age 60, the best thing you can do for your retirement funding is to keep working. You don’t have to keep the same hours, the same intensity, or even the same job, but any income will help. Even a part-time job for a few years can keep the bills paid and help grow your retirement fund. Given that many Americans have a hard time transitioning out of the workforce, this is a great way to start.
“Why didn’t I invest in an annuity?”
An annuity is not a one-size-fits-all solution for retirement, and advisors and investors alike have a mix of positive and negative feelings about them. To be clear, annuities are a tool like any other investment vehicle. They can be used to provide a guaranteed income stream for people looking for security in retirement.
More than a third of our poll respondents regretted not having an annuity and paying the higher premium for the peace of mind of guaranteed retirement income. If you think an annuity may be right for you, be sure to educate yourself on their features, benefits, costs, and how they might fit into your specific financial plan.
Why did I claim Social Security so early?
Many of our poll respondents said they were forced into retirement in 2022 and feel they claimed their Social Security benefits too early. When you turn 62 you can begin receiving a reduced Social Security benefit, as opposed to waiting until 65 to claim your full benefit amount.
There is no clear-cut answer as to whether or not you should claim your benefit early. It depends on many different factors, including your overall financial situation. Either way involves risk. The best thing to do when it comes to Social Security is to contact the AMAC Foundation’s Social Security Advisory Services at 888-750-2622, or email them at [email protected]. Their nationally accredited advisors can demystify it all for you.
If you could have made one financial decision differently in the past, what would it have been and why?
Let us know in the comments below!