Many retirement-age Americans regret not saving enough money earlier in life. A recent study found that the top two financial mistakes people make are not investing in a 401k sooner and not putting enough into an emergency fund. Ja’Net Adams, a debt expert and founder of a financial literacy program, says these regrets are troubling given the large number of Baby Boomers in the U.S. “It is important to look at how we got here and what steps can be taken to ensure that other generations don’t end up in the same situation,” she said.
Adams points to the shift from pensions to 401ks as one reason people aren’t saving consistently for retirement. Companies don’t provide much education about 401ks and do little to encourage employees to contribute beyond initial onboarding. Pensions have also become less common because they are expensive for employers.
They must pay retirees until death. Even with a pension, the money isn’t guaranteed.
Regrets about delayed savings decisions
“Over the last two decades, there have been many stories of pension plans losing all their money, leaving employees with nothing,” Adams explained. For those nearing retirement age, Adams recommends paying off debts like mortgages to reduce bills in retirement. She also suggests investing as much extra money as possible into 401ks and other retirement accounts.
Working in retirement can provide supplemental income. “You don’t have to work at a department store or a fast-food restaurant. Go back to your field and consult,” Adams advised.
The Federal Reserve’s recent decision to lower interest rates is another reminder for seniors to plan ahead. Those who rely on Social Security should prepare for smaller checks in 2025 and adjust their budgets accordingly.
