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Retirement Living: Biggest retirement regrets

There are few things in life that let you do a do-over. Retirement is not one of them.

So, if retirees had an opportunity to do something differently to prepare for their golden years, which mistakes would they correct?

Financial advisers, asked about their clients' biggest regrets, had a bunch.

"Over the years I've certainly had to have difficult conversations with my own clients,". There are two or three key mistakes — people planning for too early a retirement or too lavish a retirement.

And, unless you have someone who can counsel you, they can get off track and live to regret in years down the line," he says.

Also, he sees living too lavishly most often among business executives.

"I've worked with many successful business executives and business owners,". "Naturally, they envision a life in retirement that is just as lavish as when they were employed — business trips that include five-star hotels — whereas, in the real life of retirement, to fit their financial resources, retirement may require that they change their standards and change expectations. That adjustment can oftentimes be challenging for successful business people."

Another key mistake people make is that they fail to make provisions for catastrophic events. "Whether it's a major medical issue or a debilitating illness, those that find they are not only financing their own retirement, but an adult child who has returned after a job loss aren't accounting for real life. Planning can't just be for best-case scenarios, and far too often it is."

"A well-constructed plan, whether with advice of a professional or not, needs to account for success, as well as challenges and failures," he says.

"The top one is, in general, the failure to have a financial plan," he says. "That includes a tax plan, an income plan and an investment plan. I left out an estate plan because you don't need an estate plan to retire. But I'm not saying you shouldn't have one."

Six big regrets from clients:

1. I didn't save enough for retirement, and I spent more than I should have in my peak years. "You should be saving significant amounts in those peak earning years as you get closer to retirement. People see their salaries go up, and they continue to spend instead of save. People have been living beyond their means, and their retirement expectations are not realistic."

2. I leveraged myself too much during my peak earnings year. "People go out and live on credit cards,". "It's a terrible way to spend and live." Those who use home equity to buy a car or take a vacation often regret it, he says. "People are losing focus in that they should be saving. They over-leverage themselves and borrow too much. I teach this to all my kids. If you can't afford to pay a card off at the end of the month, you can't afford to be buying on the credit card."

3. I retired too early. The two problems with retiring too early: "You have less (time) to save, and you have a longer period of retirement that you have to provide yourself for with an inflow of income,".

4. Why did I take that money out of my IRA or 401(k)? "To take money out of your plan at an early age is a real killer, because that dollar you take out in your 20s compounded over 30 or 40 years, could grow into a significant amount. It's in your plan; leave it there."

5. I thought Social Security was supposed to provide for me. "A lot of people have the perception that Social Security would take care of them,". "It was originally part of a three-legged stool — your pension, your own savings and Social Security. People put their stock and faith in the Social Security system. Even if you believe in the Social Security system, demographically it's a bad time. When it was put in place, it was supposed to pay people at just about the expected age of death. More and more people are counting on it more and more. Ten employees were supporting every one retiree; now it's three employees supporting every one retiree. There are more people on retirement and less people to pay for the system."

6. I was a picture of health in my middle age. "As we get older, the strain on our bodies increases,". "You can't keep up with things. It surprises a lot of people what the cost of good medical care can be. We do rely on government to take care of us, but there are outside expenses the government won't pay for. Consider long-term care insurance or some sort of supplementary insurance."

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JW Financial Consulting, LLC was created on the principles of helping people like you receive advice you can trust and products that lead you to your financial goals.

At JW Financial Consulting, LLC we believe that relationships can only thrive when values match.

At JW Financial Consulting, LLC we do what's right, not what's popular!


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JW Financial Consulting, LLC

2345 South Alma School Road, Suite #106

Mesa, AZ 85210

Phone: (480) 620-6777


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