This is the biggest regret most pensioners have, research shows
If retirees could talk to their younger selves, they would tell them to save more for their golden years.
“We think the regret that most of our respondents had was that they didn’t start saving early enough,” Nate Miles, Allspring’s chief retirement officer, told Yahoo Finance Live about the company’s recent global investment survey of 2,758 adults nearing and in retirement .
As a result, many of Allspring’s respondents are considering semi-retirement.
“About 25% of them have resigned to either work later and retire later and/or just expect less in retirement,”[ads1]; Miles said.
But that’s not always a viable option, according to the survey results. One in 4 early retirees had unexpected early retirement due to job loss and health problems.
Instead, workers should focus on saving, Miles said.
He advises workers to save at least 10% of their income for retirement. Workers can even make up for lost time if they started saving for retirement later in their careers. It just means to consistently sock away more.
“One of the things that concerned us with the survey was actually that people who didn’t start saving until after 40 only saved 50% of the time to about 10%,” Miles said. “Even when people save later. , they don’t actually account for the 10 or 20 years in terms of the deferred start date.”
Employers can also play a role in helping workers reach their retirement goals through automatic enrollment plans. That’s when workers are automatically enrolled in the company’s 401(k) when they start. Some employers also offer automatic increases in contributions each year.
Studies have found that employers with automatic enrollment pension schemes have a much higher participation rate among their employees.
“For the majority of participants, they lack either the commitment or financial savvy to often make the best decision for them. So things like auto-enrollment and auto-escalation will help solve some of those issues for them,” Mile said. “And we’re seeing more and more plans add it. With the recent adoption of SECURE 2.0, we expect even more participants in employer-sponsored plans to do so.”
Automatic enrollment can also help women who are more concerned about meeting their retirement goals, Miles said. The Allspring survey found that 69% of women are confident their savings will last through retirement, compared to 87% of men.
“In general, women are less confident about retirement and generally more anxious. Part of that is that they’re often not in the workforce for their entire careers, and so they’re not taking advantage of that time in savings,” Miles said. “This is an area where [auto-enrollment plans] will really help where we’re going to get more and more women in the workforce to actually save for retirement longer.”
Ella Vincent is a personal finance reporter for Yahoo Finance. Follow her on Twitter @bookgirlchicago
Click here for the latest personal finance news to help you invest, pay off debt, buy a home, retire and more
Read the latest finance and business news from Yahoo Finance
Download the Yahoo Finance app for apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flip board, LinkedInand YouTube.
