According to a comprehensive study by the Transamerica Center for Retirement Studies, a leading research organization in retirement planning, only 23% of retirees are “very confident” they'll be able to maintain a comfortable lifestyle throughout retirement.
Despite nearly 7 in 10 retirees (69%) believing they did everything they could to prepare, many still wish they had made different choices.
Here’s what retirees say they regret the most:
Financial advisors play a key role in helping the next generation of retirees avoid these same regrets. By using Core Income’s actuarial tools, advisors can address client concerns proactively and provide the clarity and precision needed to secure their clients’ financial futures.
Let’s dive deeper into these top regrets and explore how advisors can use Core’s math-based tools to deliver greater financial certainty.
Not Saving Enough/Waiting Too Long to Start Saving
Most retirees share a common regret: not saving enough and waiting too long to start.
According to the study, 76% of retirees wish they had saved more consistently. Nearly half (49%) admit they waited too long to prioritize saving and investing for retirement.
This delay can lead to significant financial challenges. As of late 2023, retirees reported a median household savings of just $71,000, excluding home equity. Social Security remains the primary income source for 57% of retirees, while only 20% rely on personal savings, and just 18% depend on a company-funded pension. This heavy reliance on fixed sources of income highlights the consequences of missed opportunities for saving.
Thanks to the power of compounding, saving even modest amounts over time can lead to substantial gains. Unfortunately, many retirees, particularly baby boomers, delayed saving until a median age of 35, missing years of compounded growth potential.
For clients who didn’t save enough or started late, financial advisors can provide essential strategies to stretch their savings. Core Income’s Longevity Tool is a powerful resource that helps advisors guide these conversations.
The Longevity Tool, available through the Actuary Lab, allows advisors to help clients maximize existing resources and make informed decisions. The tool evaluates the likelihood of living to any future age, offering clients a realistic and cautious outlook for retirement planning.
This tool also helps advisors address a commonly underestimated risk – joint longevity (the lifespan of the longer-living partner). This feature ensures couples are better prepared to manage the financial demands of extended lifespans and unexpected expenses.
By utilizing our Longevity Tool, advisors can help to ensure their clients’ retirement savings last as long as they do—providing peace of mind in retirement.
Not Considering Inflation in Retirement Planning
For years, retirees could afford to overlook inflation as it remained steady near fixed income rates. But now, with prices climbing significantly higher, many regret the lack of attention they paid to how rising costs could impact their retirement.
Inflation is now a significant concern for retirees. According to the 2022 Retiree Reflections Survey, more than half (54%) cited inflation as a financial worry. By 2024, this concern had grown, with nearly 90% of Schroders US Retirement Survey respondents expressing fears about inflation eroding their savings and assets.
This growing awareness may explain the record-high annuity sales reported by LIMRA in recent years. Annuities provide lifetime income in exchange for a lump sum, helping retirees protect themselves against outliving their money and, in some annuities, offset inflation.
Core Income’s Inflation Tool, available through the Actuary Lab, helps advisors bring mathematical precision to this critical planning area. Instead of relying on basic assumptions, the tool allows you to tailor inflation projections to each client’s unique cash flow and retirement goals.
With customizable inputs and dynamic reports, the Inflation Tool illustrates how inflation can affect your clients’ income and purchasing power over time. This data empowers advisors to create realistic, adaptive retirement plans and provide clients with clarity and confidence, even during times of unpredictable inflation.
Retiring Too Early
Many retirees regret leaving the workforce earlier than planned, whether by choice or due to circumstances beyond their control. Research from the Transamerica Center for Retirement Studies reveals that the median retirement age is 62, limiting opportunities to save and heightening the challenge of stretching savings over a longer retirement.
Nearly 6 in 10 retirees (58%) retired sooner than expected. Health-related issues (46%) and employment-related challenges (43%) were the most common reasons. Only 21% retired earlier than expected because they felt financially prepared, while 20% did so for family-related reasons.
The timing of retirement can have a profound impact on long-term financial security. Even with identical starting balances and withdrawal rates, retirees can experience vastly different outcomes based on market performance when they begin withdrawing funds. Starting retirement in a market downturn instead of an upswing could shorten a retiree’s savings by as much as 10 years.
Core Income’s Sequence of Returns Tool helps advisors provide clarity on the decision of when to retire. By inputting details like a client’s age, portfolio balances, desired income streams, and projected market returns, the tool illustrates how different retirement start dates and market conditions can affect their financial future.
This data-driven approach empowers advisors to guide clients on when to retire, helping them safeguard their retirement income regardless of how long they live or how the market performs.
Skipping Long-Term Care Insurance
One of the most significant yet overlooked expenses is long-term care (LTC). According to the 2023 New York Life Cost of Care Survey, the median cost of a private room in a nursing home now exceeds $116,000 per year. Spending just three years in assisted living and two years in a nursing home could total over $365,000 in care expenses—costs that Medicare doesn’t cover.
Many retirees regretted not purchasing LTC insurance when they were younger and premiums were more affordable. If you wait too long, you risk being ineligible for coverage or facing prohibitively high premiums.
LTC is a looming financial threat for retirees and their families. Only 13% of retirees are confident they can afford it, and the same percentage of retirees have an actual policy in place. Nearly half (48%) of retirees say they’ll rely on family and friends for care—a solution that can strain relationships and finances alike.
Addressing this risk is critical, given that individuals have a 70% probability of requiring LTC during their lifetime, and most prefer that care at home.
Making informed decisions about LTC insurance is complex. Core Income’s Internal Rate of Return (IRR) Tool simplifies the process by providing a precise, actuarial-based evaluation of LTC products.
The IRR Tool calculates the effective tax-free annual return clients can expect on their investment in an LTC policy, considering factors like premiums, benefits, and potential death benefits. This enables advisors to compare different LTC solutions and determine which option provides the most value over time.
For example, the IRR Tool can illustrate how an LTC insurance policy might compare to self-funding care expenses or leveraging alternative products. With this data, advisors can have precise, personalized conversations with clients about the costs and benefits of each option, helping them select the solution that best aligns with their financial goals and health needs.
Wishing They Learned More About Retirement Saving and Investing
For many retirees, a lack of financial knowledge is a major regret. While 75% report having
a working understanding of personal finance, only 24% describe their knowledge as “a lot.” Nearly one in five (19%) admit they have low knowledge levels, leaving them unprepared for retirement planning.
Only 33% of retirees have worked with a financial professional, and just 7% frequently discuss savings and investments with their family or close friends.
With Core Income’s Actuary Lab tools, you can bridge the knowledge gap for your clients. These tools simplify complex concepts like inflation, longevity, IRR, and sequence of returns into clear, customized reports tailored to your clients’ unique situations.
These tools aren’t just about data—they’re about delivering actionable insights to your clients. By equipping yourself with advanced resources to engage in meaningful conversations, you can transform your clients’ retirement planning from a source of anxiety into a path toward financial confidence.
Conclusion
Leverage Core Income’s actuarial tools to help your clients take control of their retirement. These resources provide clarity and precision, helping retirees make informed financial decisions, optimize their savings, and navigate uncertainties like inflation while ensuring their money lasts a lifetime.
With only 24% of retirees feeling confident in their financial knowledge and just 19% having a written retirement plan, the need for guidance is clear. Advisors play a critical role in helping clients stay engaged, plan effectively, and secure their financial future.
Take control of your clients’ futures with Core Income’s Actuary Lab—because informed decisions today create better outcomes tomorrow.
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Core Income is an FMO, IMO, and independent insurance brokerage dedicated to serving financial advisors, their staff, and their clients.
Our mission is to help advisors deliver financial certainty by supporting them through actuarial precision, elite responsiveness, and collaborative partnerships.
To learn more about how we can support you, schedule a consultation with our team or call us at 800.541.7713.
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