The Main Causes of Financial Regret in Retirement
November 20, 2018
Retirement plans are easy to derail. Many people procrastinate or overspend, or face setbacks outside of their control—illness, job loss—and are thrown off track and regret not reaching their financial goals.
A new study from the National Bureau of Economic Research has revealed just how widespread that regret is and what causes it. The study surveyed 1,600 Americans who had retired or were near retirement age, asking them if they felt they had saved enough, and if not, what the reason was.
59 percent said they wished they had saved more. Of those who regretted not saving enough, about 80 percent worried that they would not have enough to cover their future financial needs. About a third worried they would run out of money altogether.
The main cause of regret for those surveyed was a lack of financial literacy, with 4 out of 5 respondents citing this as the reason they did not save enough. The next most common causes were illness (79 percent) and being laid off (77 percent).
Almost all of the respondents who wished that they had saved more admitted that they probably would have been able, and most could cite specific spending that they could have cut to save instead.