Millions of Americans nearing retirement are worried they won’t be able to retire. financially ready — or the fear of having to work forever.
Some are already there. Finances and retirement were top themes in Business Insider’s nearly 1,200 responses from Americans ages 48 to 90 to a voluntary survey about their lives. biggest regret. (This is part 2 of an ongoing series.)
Many baby boomer respondents said that retirement is a black box when it comes to how they invest and how much money they need. Some people think they should have hired them. financial advisorsome people regretted their expensive purchases. Some said they enrolled in Social Security too early or retired without long-term financial planning.
And some have faced unexpected setbacks, such as a cancer diagnosis, job loss, or illness. divorce I wish I had been more prepared for emergencies.
Hayes’ two main regrets with money are not investing in Verizon stock early on and not saving at least 10% of his monthly income. He also said he was a little too generous with his spending throughout his life, but said he never bought anything beyond his means. He also avoided putting his own money into his own. 401(k) He said he should have chosen more stable investments instead of short-term ones.
“You can’t suddenly expect to win the lottery,” said Hayes, who receives $1,846 a month in Social Security benefits and lives in government-subsidized housing. “You can’t expect someone to die and leave you a legacy that will make your life easier.”
A key theme among BI survey respondents was a lack of investment knowledge. For some people, this means not having enough savings. For others, it meant falling into common investment mistakes.
New research from Vanguard suggests that people who change jobs can reduce and lose their 401(k) investments, often without realizing it. As much as $300,000 throughout their careers.
Another theme among survey respondents was that it took too long to start saving. Two separate studies from Transamerica Institute and charles schwab On average, Baby boomers waited Until then 35 years old Start saving.
said Nancy Seeger, 64, who lives in a Cleveland suburb. investment A failure that had long-term effects on her finances. Ms. Seeger has two master’s degrees and has worked as a teacher and health librarian for many years. She was laid off from her $74,000-a-year job earlier this year and isn’t ready to fully retire and is still looking for work, but given her age, she can’t get a decent-paying job. I’m worried that it might be.
She told BI that she wished she had saved more money when her children were younger. retirement allowance Previously. She had some savings, but when she turned 50, she started investing more consistently.
She also did not realize that since she received a pension in addition to her Social Security benefits when she retired, she would be affected by: Little-known social security provisions That would reduce her monthly check. Between her pension of $713 a month and Social Security, which is expected to be $1,200 to $1,400 a month, she has enough to cover her rent.
“I was lucky enough to receive a small inheritance from my parents and aunt, but I’m worried that I won’t be able to do the same for my children,” Seger said. spoke. “I wanted to travel and I wanted to leave money for my kids, and now both of those goals have been compromised.”
After retirement, Seeger plans to work part-time to supplement her income, but said she has few regrets and “just let life take its course.” She will still be paying for her cancer treatment in 2022, and because she is months away from turning 65, she will not be eligible for Medicare and will have to pay for her health insurance out of pocket.
“There were a lot of unexpected events that happened, but we also realized that unexpected events affect everyone and you can’t really plan for them,” Seger said.
While $1 million in retirement benefits may be enough for some Americans, it may be too little for others.
bank of america’s financial wellness tracker It suggests that Americans between the ages of 61 and 64 need to save about 8.5 times their current salary. According to Bank of America, a 65-year-old with $1 million in savings can safely withdraw $40,000 in their first year of retirement.
For some people, saving just 1% more can lead to big financial benefits down the road. If someone earning $50,000 a year contributes 5% of their salary to a retirement fund, they will save nearly $60,000 less after 30 years than if they contributed 6%.
Merrill and Bank of America Private Bank’s Chief Investment Office Managing Director Nevenka Vrdolyak told BI that to calculate how much money you need in retirement, you need to consider your life expectancy, your retirement expenses, and your retirement costs. He said it was difficult to estimate the funding for the project.
“Changes in government benefits can affect expected income,” Vrdolyak said. “Due to fluctuations in investment returns, it is difficult to estimate how much savings you will have in the future.”
About cancer incidence rising While the diagnosis may occur early in life, another difficult calculation is how to prepare for time off from work and medical expenses that can quickly add up.
“The need for long-term care can cause more than just a financial burden in retirement; it can put a strain on your loved ones,” Vrdolyak said. “Investors with large amounts of assets may prefer to self-insure against this risk. However, for many other investors nearing retirement, long-term care insurance is a risk. It helps reduce nursing care costs.”
PJ White, 69, never dreamed of a high-paying career, but he never expected to be homeless.
Throughout her career, she has worked as a secretary for a research supply company, a retail company, and a law firm. She married at 21 and bought a house, but got divorced a year later and found herself in financial difficulties.
Although she often lived hand-to-mouth, she said she wished she had been more careful with leisure and clothing, or what she called her “play money,” and had taken the time to learn about investing. She said she rarely had anything left in savings each month, and at her peak her income was about $41,000. She quit her job in 2008 to care for her partner’s mother.
“Money just came in and went out,” White said, adding that she rarely put money into her 401(k). “I didn’t think about retirement because it was so far away, but now I wish I had.”
She and her partner recently lost their home because they couldn’t afford to pay their property taxes. they are now camping tent In San Diego. She lives on about $1,500 social security She said she fights every month to get her home back, but much of her money goes toward legal fees. She is receiving food assistance through her new health insurance company, but has not yet secured affordable housing.
“He’s not making any money, so it’s all my responsibility and I feel that way too,” White said of her partner. “I’m experiencing stress symptoms, but I have nowhere to go and no one to turn to.”
Are you an older American and have a life regret that you would be willing to share with a reporter? Please fill this out quick form or by email nsheid lower@businessinsider.com.
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