In today's episode of the "Inside the Plan with the 401(k) Brothers", host Bill Bush and Andy Bush, advisors at Horizon Financial Group take a look at top financial regrets. There is a certain saying out there and it goes something like this - NO REGRETS. Bill and Andy discuss the top 5 regrets often made by young and old Americans.
Episode Highlights
- 01:41: As per Bill, for most folks if you reach a certain age, probably you do have some sort of regret. If you don't, that's great, but that is very uncommon.
- 03:08: For younger listeners Andy suggests by going through some sort of education and financial planning you can actually start to make great decisions and choices that when you look back when you are 72, then maybe you don't have as many regrets.
- 03:47: Number One Financial regret of older Americans shared by a thumping 57% of those surveyed was not having saved more for their retirement during their working years.
- 05:02: It is a good opportunity to point out that most 401K providers, record keepers, have a pretty robust set of calculators and tools that participants can log into. So, if you haven't used those resources, start using it.
- 06:47: The past is the past, you can't go change that, but you can start to change as you gauge into the future what it's going to look like, and those tools and those calculators do that. They don't give you the exactness of it, but they at least give you a ballpark of what's it going to look like when you are 65 or 70 or and what kind of income you are going to need based on the variables at hand today.
- 07:09: Number 2 on the regret list is not saving enough. Not buying long term care insurance to pay for nursing homes or similar retirement type of community or something along those lines.
- 08:42: As per Andy number 3 regret on the list is 37% of older Americans regret not working longer.
- 11:22: Number 4 is remarkably 33% of older Americans regretted not investing in some sort of guaranteed income.
- 13:11: When planning your retirement ask yourself how are you going to replace your income? Are you doing something to replace your income when you are no longer earning it?
- 13:56: Inside of the investment options there, it's happening more on the bigger mega plans more than it is smaller plans. But you are starting to see the opportunity for a plan sponsor to put in some sort of guaranteed income of sliver for an investment option, says Bill.
- 14:26: Number 5 on the list is about 23% of older Americans claimed social security too early.
- 16:41: If you file and start taking your benefits before what is called your FRA, think of that as a penalty or a haircut on what would have come to you, and if you delay that, you actually get delayed credits.
- 17:53: Healthcare is a big expense the older you get and is often the biggest expense for folks in their 70s and 80s. And so that is trying to be as preventative as you can and lead a healthy lifestyle now before you are retired.
Three Key Points
- Bill and Andy discuss how saving rate matters and how it is in your control to put away the amount as per your requirement in future.
- Bill and Andy explain how the cost of insurance of a long-term care policy is a very small solution to a much bigger problem.
- Before claiming your Social Security, it is important to think about how long you might live? You need to ask that question rather than looking at it as if, well, the government's taking my money all of my working years, and I am going to get it back as soon as I can.
Tweetable Quotes
- "You can learn from the mistakes others have made. I am the youngest of six and I learned so many mistakes from what my older brothers did." - Andy
- "We have talked many times about Social Security and what it will replace in retirement. And for most folks, I think the best-case scenario might be its 40%, but probably not for most people. Most people, it's going to be probably 25 or less percent." - Bill
- "Raise your contribution rate up 1% each year for you know a number of years until you get to a good contribution level." - Bill
- "One of the things that are up and coming in the 401K world is the fact that Recordkeepers will start showing an illustration of what this pool of money might actually mean on a spread-out basis." - Bill
Resources Mentioned
