The No. 1 Financial Regret Recent Retirees Have — and How To Avoid It
Written by
Gabrielle Olya
Edited by
Jenna Klaverweiden
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Many Americans who retired in the last few years have the same regret — how they prepared financially before leaving the workforce. A Nationwide Retirement Institute study found that 55% of retirees who retired in the last five years have regrets about how they saved for retirement. More than one-quarter (28%) wish they had begun saving earlier, and 13% wish they contributed more to their retirement savings and investments each year.
These savings regrets are having real repercussions in retirement. Only 40% of recent retirees are on track with their original budgets and decumulation plans, and 21% have had to be more conservative with spending than they anticipated.
If you’re approaching retirement or have recently made the transition, here’s how to avoid the most common missteps and build a plan you can feel confident about.
Working With a Financial Advisor Can Help Prevent Retirement Regret
One of the most effective ways to avoid retirement planning regrets is to work with a financial professional, especially during the years leading up to and immediately after retirement.
“Advisors play an essential role, particularly during the first few years of retirement, as they help retirees navigate new financial realities, manage spending and adjust strategies,” said Kevin Jestice, president of Nationwide Financial Retirement Solutions. “The most important step for both pre-retirees and recent retirees is building a relationship with a trusted financial professional.”
A financial advisor can help translate long-term savings into a sustainable income strategy, adjust plans as markets change and provide guidance when unexpected expenses arise.
Create a Realistic Retirement Savings and Spending Plan
Once you have that relationship in place, discuss topics like contributions, withdrawal and spending plans, and investments. You should also discuss tax-efficient ways to boost savings, like Roth conversions.
“For pre-retirees and retirees still working part-time, consider catch-up contributions to IRAs or 401(k) [plans],” Jestice said. “Create or revisit withdrawal strategies that balance income needs with longevity risk, and bucket expenses into essential versus discretionary spending to prioritize needs.”
He also recommended discussing strategies that hedge inflation and offer guaranteed income in retirement, like annuities, which can help retirees feel more confident about covering core expenses over time.
Have a Plan for Covering Health-Related Costs
Healthcare is one of the most commonly underestimated expenses in retirement — and one of the biggest sources of financial stress for retirees.
Medicare premiums, supplemental insurance, prescription drugs and out-of-pocket costs can add up quickly. Long-term care expenses, in particular, can have a significant impact on retirement savings if they’re not planned for in advance.
“Your advisor can help you estimate Medicare premiums, supplemental insurance and out-of-pocket costs, as well as explore long-term care insurance,” Jestice said.
Planning for these expenses early can help prevent unpleasant surprises and reduce the risk of needing to scale back your lifestyle later in retirement.
Planning Ahead Can Make Retirement More Secure
While many recent retirees wish they had saved more or started earlier, it’s never too late to improve your financial outlook — or to avoid the same regrets if retirement is still ahead.
“By openly communicating concerns and goals with an advisor,” Jestice said, “both pre-retirees and those already living in retirement can feel more confident about their plans.”
With the right guidance and a thoughtful approach to saving, spending and healthcare planning, retirees can replace uncertainty with confidence, and enjoy the retirement they worked so hard to build.
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