I Saved Too Little for Retirement: What I Wish I’d Done Differently

Close up head shot frustrated middle aged 60s woman standing near window, looking in distance, feeling depressed indoors.
fizkes / iStock.com

As retirement looms for millions of baby boomers over the next few years, you may wonder if you have saved enough to live the lifestyle you want.

According to Merrill Lynch, saving for retirement should start early. They recommend aiming to save approximately 1.6 times your current salary between the ages of 31-35 and up to 9.2 times your salary at the age of 61-64. So, whether you are just a few years into your career or are nearing retirement, you will want to make sure you are putting enough money away each year.

But what happens when you don’t? GOBankingRates spoke with one person who regrets not saving more for retirement and asked financial experts to weigh in on what people who have saved too little for retirement should do. Here are their suggestions to help you avoid regret during your golden years.

Start Now and Start Early

Lisamarie Monaco, co-owner of InsuranceForBurial.com, said that while she owns her own business now, advising over 4,000 clients, she has retired after 18 years from her previous employment. Looking back, she said, “I do wish I would have started saving more in my 20’s. I also wish I would have increased my retirement contribution during that time, and lastly, I wish I would have started my 10% savings account at that time, as well.”

She added, “The best advice for others is [to] start now, start early and teach your young children to do the same. Make it a habit, make it mandatory and keep consistency. The best way to begin is to write out all your current debt and financial responsibilities. Create a separate savings account for your retirement and increase your contributions to your retirement plan.”

Make Your Money Work Better for You

“Educate yourself and do not take on any other unnecessary debt,” she concluded.

Delay Claiming Social Security

Financial expert and CEO of Guardian Rock Wealth, John Browning, wrote about “the power of delayed Social Security claiming.”

He explained, “While many are aware of the option to claim Social Security benefits early, there’s a nuanced strategy that often goes overlooked. Delaying the claiming of Social Security benefits until age 70 can result in significantly higher monthly payouts. For each year beyond the full retirement age that you delay, your benefit increases by a certain percentage up to age 70. This strategic delay can substantially enhance your overall retirement income, providing a crucial boost during the later years of your life.”

Use a Health Savings Account as a Retirement Vehicle

Browning, who spent over 30 years on Wall Street expanding his portfolio and has decades of experience in financial planning and advisory, also suggested using health savings accounts as a retirement vehicle. He noted, “Beyond their immediate use for covering medical expenses, Health Savings Accounts (HSAs) can be a potent tool for retirement savings.”

He continued, “Contributions to an HSA are tax-deductible, and withdrawals for qualified medical expenses are tax-free. However, what’s often missed is that once you turn 65, you can withdraw funds for non-medical expenses without incurring the usual 20% penalty. While subject to income tax, this flexibility makes HSAs a unique dual-purpose vehicle, offering potential long-term financial advantages.”

Make Your Money Work Better for You

In-Service 401(k) Rollovers

“Many employees are unaware of the option for an in-service 401(k) rollover,” said Browning.

He suggested, “If your employer’s plan allows it, you can roll over a portion of your 401(k) funds into an Individual Retirement Account (IRA) while still employed. This can provide greater investment flexibility, potentially lower fees and the ability to diversify your retirement assets more effectively. It’s a lesser-known tactic that empowers individuals to optimize their retirement portfolios even before they leave the workforce.”

Save More and Spend Less

R.J. Weiss, certified financial planner and CEO of the personal finance site The Ways to Wealth, said, “If you haven’t saved enough, you need to find ways to save more or spend less. While you can’t change the past, there are always steps you can take to improve your future.”

He recommended, “A smart strategy is to delay touching your retirement money for as long as possible. This might mean delaying full retirement, even working part-time, to keep money coming in. This way, your retirement savings continue to grow without touching the principal.”

“A common mistake is to try to ‘hit it big’ with a risky investment to make up for a shortfall,” he cautioned. “But this is far more likely to cause severe financial stress than be a golden ticket to a prosperous retirement. A better plan is to stick with a diversified portfolio that grows your money steadily over time. This steady approach, along with cutting unnecessary spending and finding ways to earn a bit more, can help fill in the savings gap.”

Make Your Money Work Better for You

Long Story Short

These financial experts seem to unanimously agree that starting early is key to successful retirement savings, but even if you got a late start, there are ways to overcome a deficit. The most important thing is to start now and keep working toward your goals.

More From GOBankingRates


See Today's Best
Banking Offers