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Most retirement advice is geared toward saving — cutting expenses, increasing your income and growing your nest egg as big as possible to ensure you don’t outlive your money.
All those steps are crucial, but just as you can never go back and save more money, there are also no second chances to spend on things that might have brought you fulfillment, happiness and wealth later in life.
GOBankingRates spoke with two financial planning experts who know this scenario all too well. Here’s what the retirees they advise wish they had spent more on earlier in life.
Many Retirees With the Same Regrets
Max Avery is an author, keynote speaker and business development and growth professional who was appointed by Commerce Secretary Wilbur Ross in 2018. He has served on the Arkansas District Export Council and contributed to the National Small Business Association, serving on both the Small Business Exporters Committee and Economic Development Committee and served a two-year term on the City of Alma economic development committee.
Along the way, he has shepherded countless business owners out of entrepreneurialism and into retirement.
Over and over, he’s heard them express remorse — not about the money they didn’t save, but the things they wish they had spent more money on in their younger years.
Avery calls health in retirement “the true wealth” — and he’s encountered many otherwise well-off retirees who underinvested in it.
“A common regret among retirees is not prioritizing health-related expenses,” he said. “Beyond routine check-ups, investing in preventive dental work and other health-centric measures proves invaluable. Neglecting this in earlier years often leads to unexpected healthcare costs in retirement. A stitch in time saves nine, not just for your wardrobe, but for your well-being.”
The stakes are financial as much as they are physical and mental.
According to Merrill Lynch, “Even with Medicare, medical costs could put you at risk of outliving your savings.”
A healthy 65-year-old who retired in 2023 will likely use almost 70% of their lifetime Social Security benefits to pay for premiums, critical services and out-of-pocket expenses that Medicare doesn’t cover. Yet only about half of Americans understand how much it will cost to cover healthcare in retirement.
Spending on Their Homes as if Their Retirements Depended on It
According to the American Society on Aging (ASA), homeownership is one of the starkest differentiators between retirees who thrive and those who just survive.
A home can be a significant source of wealth that dramatically reduces housing costs and that seniors can tap to cover expenses. While owning a house comes with stress and risk, “even older homeowners with high levels of mortgage debt are much more financially secure than renters,” according to the ASA — but only if those homes are well-maintained and don’t become depreciating and unsellable late-life money pits.
Are You Retirement Ready?
“Many retirees find themselves wishing they had allocated more resources to better home maintenance,” Avery said. “Overlooking minor repairs or upgrades in earlier years can lead to significant expenses later. A well-maintained home not only provides comfort but can also be a lucrative asset in the ever-changing real estate landscape.”
Many parents — particularly those who build their own wealth — refuse to assist their adult children financially because they believe they’ll never grow if they know they can always rely on their parents. While that philosophy isn’t totally without merit, many evolve to regret being so rigid later in life in refusing to help them achieve milestones like getting married or buying a car or a home.
“Retirees frequently express the desire to have supported their children more substantially,” Avery said. “Offering financial assistance to offspring during critical life stages pays dividends in the form of a lasting family legacy. Financial well-being is a torch passed down through generations.”
A Warning Not To Underspend in Two Key Areas
Harvard-trained economist and personal finance expert Keisha Blair is the international bestselling author of the “Holistic Wealth” book series, host of the “Holistic Wealth” podcast and founder of the Institute on Holistic Wealth. Her most recent book won the Best Book Award in the Self-Help Motivational category of the 2023 American Book Fest Awards.
“Retirees often express regret about certain financial decisions they wish they had made earlier in life,” she said. “Understanding these regrets can provide valuable insights into the psychology of financial choices. Here are two common investments retirees wish they had prioritized.”
Are You Retirement Ready?
For many retirees, missed opportunities for healthy generational spending extend beyond just adult children — they often continue on to their children’s children, as well.
Grandparents who open tax-advantaged 529 college savings plans can enable their posterity to afford the astronomical cost of higher education without saddling themselves with years or decades of student debt. Those who don’t start early miss out on years of tax-free compounding.
“Not supporting grandchildren’s education emerges as a significant regret,” Blair said. “Investing in a grandchild’s college fund can have long-lasting positive effects, promoting education and financial security for future generations.”
Finally, many seniors look back and realize that they spent their lives living to save instead of saving to live. A healthy nest egg is a must, but all the money in the world can’t buy back the opportunity to experience the things that make life worth living.
“Many retirees express a desire to have invested more in travel and experiences, especially in the early phases of life,” Blair said. “The enriching and memorable moments gained through exploration often outweigh material possessions.”
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I am an experienced financial planning enthusiast with a deep understanding of retirement strategies and wealth management. My expertise is backed by a comprehensive knowledge of various financial concepts, including investments, health and wellness, homeownership, family financial support, and strategic spending for a fulfilling retirement.
In the article you provided, the financial planning experts, Max Avery and Keisha Blair, offer valuable insights into the regrets of retirees and the areas they wish they had prioritized earlier in life. Here's a breakdown of the key concepts discussed:
Investments in Health and Wellness:
- Max Avery emphasizes the importance of prioritizing health-related expenses in retirement.
- Neglecting preventive measures, such as dental work, in earlier years can lead to unexpected healthcare costs in retirement.
- Merrill Lynch highlights that even with Medicare, medical costs could pose a risk of outliving savings, making health a crucial aspect of retirement wealth.
Spending on Homes:
- Homeownership is discussed as a significant differentiator between thriving and surviving retirees, according to the American Society on Aging.
- A well-maintained home can be a valuable asset that reduces housing costs and provides financial security.
- Neglecting home maintenance in earlier years may lead to significant expenses later in retirement.
Supporting Adult Children:
- Retirees often express regret about not providing more substantial financial support to their adult children during critical life stages.
- Financial assistance during milestones like marriage, home buying, or car purchase is seen as an investment in a lasting family legacy.
Contributing to Grandchildren's Education:
- Keisha Blair highlights the regret retirees feel about not supporting their grandchildren's education.
- Opening tax-advantaged 529 college savings plans is presented as a way to promote education and financial security for future generations.
Investing in Travel and Experiences:
- Retirees express a desire to have invested more in travel and experiences, viewing enriching and memorable moments as more valuable than material possessions.
- The article suggests that seniors often realize the importance of saving to live rather than living to save, emphasizing the significance of life experiences.
These concepts collectively provide a holistic view of retirement planning, emphasizing not only financial aspects but also the importance of health, family, and experiences for a fulfilling retirement.