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Millions of Americans regret not saving for retirement earlier. Don't let it happen to you

Saving for retirement can be hard. The key is to start early.

We all set out to live a life with no regrets, but sooner or later something happens that we wish we could take back, and oftentimes it includes money. 

According to a new study from Bankrate, a personal finance site, 75% of of Americans admitted that they have financial regrets. Of that, 18% of Americans say their biggest financial regret is not saving for retirement early enough. 13% of people say they regret not saving enough for emergencies, and 9% regret taking on too much student loan debt. 

Of the some 1,000 adults surveyed by Bankrate, it’s no surprise that older respondents are the ones feeling the heat, with 27% of people 65 and older admitting they have retirement regret. That’s compared to 17% of people between 30 and 49.

As a 30-something trying to keep it all afloat, this study really hit me. I feel like I’m saving enough money now for my retirement. I mean I HAVE a 401(k)…that’s good, right? But is it good enough? And what should I do now to ensure I don’t have financial regrets when I’m 65?

For answers I reached out to Teresa Ghilarducci, an economics professor and expert on all things retirement. She also wrote a book called, “How to Retire with Enough Money: And How to Know What Enough Is,” so if anyone was going to help me out, it would be her.

Clearly, we all know it’s a good idea to save money for our golden years, but finding the money can be hard. With student loans, growing families and mortgages, there is rarely extra money just laying around to stash away. But Ghilarducci says that’s no excuse. 

“If you’re young and not saving for your retirement, it’s like walking past a $500 bill on the sidewalk – time is on your side, and you’re not taking advantage of what comes free to you,” she told Yahoo Finance.

Sticking to a budget will allow you to enjoy retirement when the time comes.

According to Ghilarducci, everyone – especially younger workers – should look at saving for retirement as an everyday cost. Just like Social Security is automatically taken out of your paycheck, retirement contributions should be automatic.

“Factor it in from the beginning, and save as if the government is making you do it,” she says. (And in fact a new government-backed savings tool, called MyRA, makes saving for retirement a possibility for workers without access to a company-sponsored 401(k).) If your company offers a 401(k) plan that matches your contributions, take advantage of it. That’s just a no-brainer. If they don’t, Ghilarducci suggests setting up your own traditional Individual Retirement Account (IRA) with a reliable company like Vanguard.

The next question is, “How much should you be saving?”

By 30… you should be saving 10% of your yearly income. Which means if you make the national median income of $50,000, you should be squirreling away at least $5,000 a year.

By 40… If you started in your 30s, continue to save 10% of your income. If you’re starting fresh, you should be putting away 25% of your income.

By 50… If you started saving diligently in your 30s, continue to save 10%. If you got a late start, you’ll need to really step it up and aim to put away half of your salary for retirement – and possibly delay retiring.

When all is said and done, Ghilarducci says the goal is to save 10 times your annual salary, which is $500,000 if you make $50,000 annually. That’s a big number, but using a realistic rate of return, that’s the amount of money you’ll need to maintain your standard of living. It’s a lofty goal, but one that is attainable the sooner you start saving.

Still, don’t beat yourself up if you started saving later in life.

“When people have control over their lives, they aren’t depressed. If you’re having to save 50% of your salary, it inoculates you against depression because you have agency and control,” says Ghilarducci. “Working for your independence is not depressing.” 

Do you have questions about retirement? Email us at yfmoneymailbag@yahoo.com.