Millions of Americans facing retirement are worried they won’t have enough money – or fear they won’t work at all.
Some are already there. Money and retirement were themes in nearly 1,200 responses Business Insider received from Americans between the ages of 48 and 90 who filled out a voluntary survey about their biggest regrets. (This is the second part of the continuation.)
Retirement – how to invest and how much one needs – is a black box for many. Some wish they had hired a financial advisor, while others regret the expensive purchase. Others said they took Social Security early or retired without a long-term financial plan.
Then there are those who have experienced an unexpected crisis such as cancer, job loss, or divorce and wish they were better prepared for emergencies.
Gary Lee Hayes, 70, wished he had been more organized with his savings and investments. The California native served briefly in the Navy, earned a degree in public administration, and worked in mental health and manual positions. He had little financial knowledge growing up and said he didn’t focus on building his career into a profitable one.
Hayes’ two financial regrets are not investing in Verizon stock first and not saving 10% of his money each month. He also said that he was very liberal with his spending throughout his life, although he said that he never bought more than he could afford. He also avoided investing in his 401(k) and said he should have chosen a stable investment instead of a short-term one.
“You can’t expect to win the lottery all of a sudden,” said Hayes, who receives $1,846 a month in Social Security and lives in subsidized housing. “You can’t expect someone to pass and leave a legacy that will make your life better.”
The main theme among BI respondents is that they have no knowledge about investing. For some, this meant not saving enough; for others, it meant falling into some investment mistakes.
New research from Vanguard shows that people who change jobs underinvest in their 401(k)s, often without realizing it, and can lose as much as $300,000 over the course of their careers.
Another theme among survey respondents was that they waited too long to start saving. Two separate studies from the Transamerica Institute and Charles Schwab found that, on average, boomers waited until age 35 to start saving.
Nancy Seeger, 64, who lives outside of Cleveland, said she made investing mistakes that had long-term effects on her finances. Seeger, who has two master’s degrees, has worked for many years as a teacher and health librarian. He was laid off earlier this year from his $74,000-a-year job and although he’s not quite ready to retire and is still looking for work, he worries that he won’t be able to find another job that pays well at his age.
He told BI that he wishes he had saved more when his children were young and started saving for retirement earlier. Although he had some savings, he started to invest more in his money at the age of 50.
He also did not realize that because he has a pension other than receiving Social Security when he retires, he would be hit with a sudden Social Security check that would reduce his monthly check. Between his $713 monthly pension and Social Security, which he expects to be between $1,200 and $1,400 a month, he will have just enough to pay his rent.
“I was lucky enough to receive an inheritance from my parents and aunt, which saved me, but it doesn’t allow me to have my children, which makes me very sad,” said Seeger. “I was hoping to travel, and I wanted to leave money to my children, but all these goals are in vain.”
Seeger said he has few regrets and “let life come to me,” though he plans to take a part-time job in retirement to supplement his income. He’s still shelling out for cancer treatment bills in 2022, and because he has a few months until he turns 65, he can’t get Medicare and has to pay for health insurance out of pocket.
“I’ve had a lot of unexpected things happen, but I’ve also come to understand that the unexpected happens to everyone, and you can’t plan for it,” Seeger said.
While $1 million for retirement may be enough for some Americans, it may be too little for others.
Bank of America’s Financial Wellness Tracker shows that Americans aged 61 to 64 should have at least 8.5 times their current salary in savings. Someone with $1 million in savings at age 65 can safely withdraw $40,000 in their first year of retirement, Bank of America said.
For some, saving just 1% can have significant financial rewards down the line. If someone making $50,000 a year contributes 5% of their income to retirement, they are more likely to save about $60,000 after 30 years than if they contribute 6%.
Nevenka Vrdoljak, managing director in the chief investment office of Merrill and Bank of America Private Bank, told BI that calculating how much money you need in retirement requires a complex estimate of life expectancy, retirement spending, and retirement spending.
“Changes in government benefits can affect expected income,” said Vrdoljak. “The fluctuating rate of return makes it difficult to predict how much money you will have to save in the future.”
With cancer rates on the rise and diagnoses coming earlier in life, some difficult reading is how to prepare for downtime and quickly rising medical bills.
“The need for long-term care can cause more than financial problems in retirement. It can put a burden on those who need it,” said Vrdoljak. “Investors with high net worth may want to insure themselves against this risk. But for many other investors nearing retirement, long-term insurance can help reduce risk and the cost of care.”
PJ White, 68, never dreamed of a lucrative job – but she never expected to be homeless.
Throughout his career, he worked for a lab sales company, sales companies, and as a secretary for law firms. He got married at 21 and bought a house, but got divorced a year later, which set him back financially.
Although he said he always got along, he wished he had been more careful about spending on leisure and clothing – what he called “play money” – and set aside time to learn about investing. He said he rarely had any money left over each month, and his highest income was about $41,000. He retired in 2008 while taking care of his partner’s mother.
“The money was coming in and going out,” White said, adding that he rarely invested in the 401(k). “I didn’t think about retirement because it was far down the road, but now I’m wishing I had it.”
He recently lost his home because he and his partner couldn’t pay property taxes. They now live in a tent in San Diego. He lives on about $1,500 in Social Security each month as they fight to get their house back, but he said most of his money goes to the courts. He got help with groceries through his new health insurance company, but he still hasn’t found an affordable home.
“He doesn’t make any money, so it’s all on me, and I’m feeling it,” White said of his partner. “I’m showing signs of stress, and I have nowhere to go, no one to turn to.”
Are you an older American with any life regrets that you would be comfortable sharing with a reporter? Please fill this out quick form or email nsheidlower@businessinsider.com.
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