Regrets, They Have a Few: Recent Retirees Wish They Did More to Save
More than half (55%) of recent retirees—55%—say they have regrets about how they saved for retirement, according to a new Advisor Authority study from the Nationwide Retirement Institute.
More than a quarter (28%) of those who have retired within the past 5 years told the survey wish they began saving earlier, and 13% wish they contributed more to their retirement savings and investments each year.
“Many recent retirees told us they wish they had saved differently, highlighting a critical truth: retirement planning isn’t just about setting a number—it’s about building a strategy that anticipates life’s changes and regularly revisiting that plan as life happens,” said Kevin Jestice, president of Nationwide Retirement Solutions.
Nationwide said immediate, tangible financial challenges are fueling these concerns. Just 40% of recent retirees say they’re on track with their original budget and decumulation plan, and 21% say they’ve had to be more conservative with spending compared to their pre-retirement expectations. Only one in five (20%) have avoided the need to tap retirement savings by relying solely on the guaranteed income of a pension and/or Social Security, resulting in a majority who may need to lean on their self-invested retirement funds accumulated in their working years.
“For those already retired, it’s not too late to take steps to enhance your retirement strategy. Reviewing your budget, exploring additional income opportunities and working with a financial advisor can help you feel more secure and in control,” Jestice said, adding that leveraging planning resources offered through a workplace retirement plan and working with a financial advisor are particularly useful resources.
Advisors see early retirement challenges
Financial professionals understand the first two years of retirement require heightened attention and strategic adjustments. Based on what they see with their own clients, top challenges for recent retirees cited by advisors include:
- Adjusting to life without a paycheck: 60% of advisors say adjusting to not earning active income or not having a job is a challenge their recently retired clients face in their first two years of retirement.
- Managing anxiety about market volatility: 42% of advisors say dealing with anxiety about market volatility while living off investments is a challenge.
- Staying within budget: 41% of advisors say maintaining their desired lifestyle within budget constraints is a challenge.
Market conditions are driving advisors to take action. The vast majority (85%) of advisors say recent market conditions caused them to recommend changes to clients’ decumulation strategies, and nearly half (45%) made significant changes across most of their recent retiree clients’ decumulation strategies.
Market volatility spurs action
The research found 50% of recent retirees made at least some changes to their retirement portfolio due to market turbulence, compared to just one-third (33%) of longer-term retirees. Additionally, 15% made significant changes to their portfolio—nearly double the 8% of longer-term retirees who did the same.
The impact extends beyond portfolio adjustment and into real-world spending decisions. Nearly half (47%) of recent retirees say recent market volatility has impacted the way they approach managing their portfolio and withdrawing or spending down their savings in retirement, compared to 35% of longer-term retirees.
“The first few years of retirement are critical, and we’re encouraged to see recent retirees lean on their advisors to navigate a changing market environment.”
Kevin Jestice, Nationwide Retirement Solutions
This market uncertainty is also driving interest in guaranteed income solutions. Thirty-six percent of recent retirees said they are more likely to put part of their portfolio in an annuity given the events of the last 12 months.
“The first few years of retirement are critical, and we’re encouraged to see recent retirees lean on their advisors to navigate a changing market environment. Advisors play an essential role during this period, helping retirees navigate new financial realities, manage spending and adjust strategies as their next chapter begins to unfold,” Jestice said. “Advisors can help boost confidence by reviewing or exploring guaranteed income solutions or other strategies to address longevity risk. With expert guidance, retirees can feel confident their plan supports both today’s needs and tomorrow’s possibilities.”
The Nationwide Retirement Institute’s 11th annual Advisor Authority study explores critical issues confronting advisors, financial professionals and individual investors—and the innovative techniques that they need to succeed in today’s complex market.
For more insights on the survey data, check out this infographic.
SEE ALSO:
• Record U.S. Life Expectancy Raises Bar for Retirement Readiness
• Affordability Squeeze Makes Americans More Risk Averse, F&G Survey Finds
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.