Retirees often regret not understanding how taxes would affect the money they withdraw from retirement accounts, leading to bigger tax bills than expected. This is particularly true for those who did not contribute enough to tax-deferred accounts like IRAs or company-sponsored retirement plans, or who made inappropriate asset allocation decisions at a younger age.
Another common regret is not planning adequately for healthcare expenses, which can be a significant financial burden in retirement. Many retirees wish they had purchased long-term care insurance while they were still young and healthy enough to qualify for lower premiums. Additionally, building a dedicated healthcare savings account, such as a Health Savings Account, can help cover future medical expenses.
Retirees also regret not paying closer attention to the fees they paid for investments or financial advice, especially if they did not get enough value in return. This can result in fees eating away at their savings. Some retirees also regret selling their investments when the market took a downturn due to fear, realizing in hindsight that staying invested would have been a smarter move.
Claiming Social Security benefits too early is another significant regret. Many retirees wish they had waited longer to claim these benefits, as this would have resulted in larger monthly checks for the rest of their lives. This is because Social Security payments increase the longer you wait to begin claiming them.
Retirees often regret not paying off debt before retiring, as debt payments can eat into their limited retirement income and add stress to their financial situation. They also regret not planning for the cost of living increases, which can be significant, especially for those who retired early.
Finally, retirees regret not prioritizing their health earlier in life, as poor dietary choices and lack of physical activity can catch up with them over time. This can lead to chronic health issues and frequent medical visits, which can be a financial burden in retirement.
