7 Financial Steps American Retirees Want to Avoid
Hindsight costs nothing, but when you retire, it can seem like it costs everything. A few decisions made over the years determine whether your later years provide comfort or continued financial stress.
When researchers asked retirees what they could have done differently, a clear pattern of regret emerged. This is not a case of reckless gambling. They are matters of making a general human calculation: prioritizing what feels urgent now over what is important later.
1. Early retirement
Leaving the workforce unprepared is one of the most common financial regrets. According to a study published by the National Bureau of Economic Research (NBER), 37% of American adults wish they had worked longer.
Every additional year of work means one year less savings and one year less compounded growth. It also opens the door for the employer to continue matching contributions to retirement accounts.
Retiring at 55 or 60 leaves almost no margin for error, requiring your portfolio to span three decades or more.
2. Claiming Social Security too early
The temptation to take the money and run at age 62 is strong. Most people think they are starting from scratch. In fact, they are stuck in low income for the rest of their lives.
Claiming Social Security at 62 locks in permanent benefit reductions of up to 30%. Hold until age 70, and those monthly payments can work out to about 76% more than the 62-year rate. The math is brutal for those who live into their 80s and 90s and find themselves relying on a much smaller monthly paycheck.
3. Not saving enough, early
The same NBER study found that 57% of respondents deeply regretted not saving more money during their working years. Compound interest figures only come across as emotional when you’re staring at a balance sheet that should be twice as big as it is.
Workers who delay saving big until age 40 or 50 face catch-up figures that are almost impossible. Even the most contributions late in your career won’t make up for the decades of lost compound growth you gave up in your 20s and 30s.
4. Estimating health care costs
A 65-year-old retiring in 2025 can expect to spend $172,500 on health care during retirement, according to Fidelity Investments. That number has increased by more than 4% since 2024 and continues to rise.
This estimate does not even include long-term care. It simply covers standard out-of-pocket costs, Medicare premiums, and prescription drugs. Many retirees think that Medicare covers everything. It doesn’t cover many dental, vision, or hearing needs, leaving large gaps that quickly deplete regular savings accounts.
5. Neglecting long-term care
Most people turning 65 will need some form of long-term care, yet few are adequately prepared for it. Assisted living facilities typically cost tens of thousands of dollars per year, and dedicated memory care can easily exceed the six-figure annual price tag.
Medicare covers almost none of these care costs. Unsurprisingly, 40% of respondents to the NBER survey regretted not purchasing long-term care insurance. Getting help or putting aside contributions in your 50s sits near the top of every list of things retirees wish they had done earlier.
6. Carrying debts until you reach retirement
The general goal has always been to retire debt-free. Today, that idea is fading. According to the Employee Benefit Research Institute, 68% of retirees with debt report carrying credit card balances by 2024.
Carrying high-interest debt on fixed income not only slows down your wealth building. He pulls it back with force. When credit card rates hover around 20%, a manageable deficit quickly turns into a deep hole without a paycheck available to fill it.
7. Playing it is very safe with investments
Shifting your entire portfolio to bonds and certificates of deposit sounds smart in some years. The problem is that absolute security has its biggest risk – the gradual erosion of purchasing power.
If a conservative portfolio earns 3% while inflation is running at 4%, you lose leverage every year. According to the 2025 Natixis Global Retirement Index, 69% of investors report that continued inflation has already reduced the future value of retirement savings, and nearly 40% say it is killing their retirement dreams. You should maintain sufficient exposure to growth assets such as equities to ensure that your money outpaces the rising cost of living over a 25-year retirement.
If you have more than $100,000 in savings, consider getting professional advice before making any retirement decisions. SmartAsset offers a free service that matches you with a vetted, fiduciary advisor in less than 5 minutes.
The true cost of hindsight
Planning for retirement requires you to think in terms of decades, not just a year or two. The thread running through all of these regrets is the failure to accurately predict the length and cost of modern retirement.
You can’t change the past, but you can examine your current trajectory. Making small, uncomfortable changes today is the only guaranteed way to buy yourself peace of mind tomorrow.
Regardless of when you retire, you can take advantage of discounts through AARP. Reduce the cost of food, travel, eyeglasses, prescriptions, and more — just $15 a year with automatic renewal. Join now and save hundreds.
