Big financial regret for some: Not starting early to save for retirement
When considering retirement savings, the Fed says only half of middle-income Americans even have a retirement account.
Regrets? Americans have a few. But one financial regret that is the biggest for 18 percent of Americans is not saving earlier for retirement.
A new survey from Bankrate.com finds that not only do Americans have financial regrets, but they’re procrastinating in addressing the issue, whatever it is. In fact, a whopping 49 percent of those who do say they haven’t started to tackle it. Some plan to put it off indefinitely, with 25 percent saying they have no plans to address it; 19 percent think they’ll get around to it in the next year, while six percent say it will take them more than a year.
While the largest percentage of respondents, at 39 percent, say their biggest financial regret is not saving enough, the next largest, at 18 percent, say they wish they’d started saving for retirement earlier. Fourteen percent regret not saving enough for emergency expenses, and seven percent would have liked to have saved more for the kids’ education. Two percent said they regretted buying too much house for their wallets.
Even millennials already have financial regrets, with 22 percent lamenting a too-small emergency fund and 18 percent taking on too much student loan debt.
But when you consider what experts recommend for emergency funds and retirement funds, it’s no wonder that people haven’t been able to amass balances that would make them feel more secure.
For emergency funds, planners say workers should have six months’ worth of essential expenses set aside—which sounds fine, till you add it up and realize that, according to a recent Bankrate report, that amounts to about $23,000 for the average household living in a major metropolitan area.
And how much does the average American actually have? Federal Reserve data put it at less than $4,000. And that’s why 39 percent wouldn’t raid their savings to pay an unexpected expense of $1,000.
When considering retirement savings, the picture is just as bleak, since the Fed says only half of middle-income Americans even have a retirement account—and the median balance is $25,000. Compare that with the recommendation of financial planners, which is that to have a secure retirement, you need about 11 times your final paycheck.
And only 60 percent of older workers between the ages of 55–64 (the 10 years before retirement) are actually saving for retirement. Not only that, but considering that they’re so close to leaving the job, the fact that they have only a median balance of $120,000 should make them afraid—very afraid. And it does.
Unsurprisingly, the Center for Retirement Research at Boston College says that half of working-age adults might not be able to maintain their standard of living once they stop working.
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