Retirement can be a long, confusing process, especially because it comes with such an important set of financial decisions. Luckily, when it comes to making the right decisions, we can learn from the wisdom of our elders. Here are some of seniors’ biggest financial regrets, and how to avoid them.
Save enough for retirement
In a survey, many seniors said their number one regret was not saving enough for retirement. There are a number of calculators online that can help you figure out how much to save for retirement. Use them so you know how much you should ideally be saving every year.
Learn how to invest
Don’t be one of the seniors who regrets not learning how to invest. The other side of saving for retirement, beyond contributing to a 401k, investing. Investing can eventually become a source of income, whether it’s through dividends or by selling your shares over time.
Make decisions based on your level of knowledge
Additionally, you don’t want to be a senior who regrets bad investments. Most people don’t ever learn how to invest well, which can lead to poor financial decisions. If you don’t want to learn every in and out of investing—and most people won’t, which is perfectly fine—a less expensive broad-market index fund generally follows overall stock market’s rate of return. Inexpensive index funds may even be available through your workplace, so this is something to consider when setting up your 401k or to ask HR about.
Getting into too much debt
Debt is another one of seniors’ biggest regrets. It’s advisable at any age to avoid getting into too much debt. However, for many people, this is easier said than done. Even if you miss a single payment, many credit cards will raise your interest rate to a “penalty APR,” which can be as high as 25 to 30%. In some cases, this will raise your debt faster than you can pay it off. Consider what you can afford before you buy so you don’t end up digging yourself into debt
If you’re already in debt, one option is to consider a debt consolidation plan. This can help some people reduce their payments on certain types of debt. Because debt consolidation plans are often lower-interest, the payment is typically lower. Not only does this ease some financial burden, but it can help you ensure you’re taking care of your credit score. So, if you have credit card or personal loan debt, you may want to think about consolidation. Some companies will even give you a free initial evaluation.
Other common regrets are spending too much on nonessentials, taking jobs that pay well but aren’t enjoyable, and taking jobs that are enjoyable but don’t pay well. With a lot of consideration and careful investment, you too can avoid these mistakes and set aside a sizeable sum for retirement.