What today’s retirees want future retirees to know

Respondents ranged in age from 55 to 80 and had assets ranging from $ 50,000 to $ 5 million, not including equity. The average time spent in retirement by respondents is seven years.

Overall, 70% of respondents would advise younger people to change their previous financial habits so that they can save and invest more and start earlier.

When asked what they would do differently to save more for retirement, respondents gave open-ended answers, ranging from taking less leave or saving less for their children. higher education, to avoid 401 (k) loans or more aggressive investment and closer cooperation with a financial planner.

Approximately half (49%) of all respondents to the survey said they wanted to start planning to retire earlier.

Not surprisingly, 55% of respondents with the lowest assets (less than $ 500,000) are more likely to say that they wished they had started saving earlier. But a still high percentage – 40% – of those with between $ 500,000 and $ 2 million feel the same way, as do 23% of people whose assets exceed $ 2 million.

The power of combining and the power of averaging spending in dollars by steadily investing small amounts over time are the best things retirement savers have for them.

The earlier they start saving, the bigger their nest eggs will be on the day they retire.

Inflation factor

The study was conducted between April 26 and May 8, a period during which historically high inflation has already occurred.
'This is not the retirement I imagined.'  How retirees are affected by inflation

When asked what their main financial worries are today, inflation came first. This is up from position № 4, when respondents were asked what their main financial concerns were about retiring five years before retiring.

“Rising concerns about inflation between before and after retirement show that many retirees did not expect or were adequately prepared for high inflation,” EBRI researchers wrote.

And don’t forget about taxes

Taxes can be one of the few security in life. But in retirement, it is not clear to many people how much (or small) bite they will take from their various sources of income.

Nearly half of respondents (48%) said they did not understand how taxes would affect their retirement finances.

And nearly 40% said they pay different taxes than they expected. The majority of this group said they were paying more than expected, but only 23% of all respondents said the same.

The pensioner’s source of income may include one or more of the following: social security benefits, pension payments, annuity payments, required minimum distributions of deferred tax IRAs or 401 (k) s, tax deductible deduction accounts and tax-exempt deductions from Roth IRAs.

How much you will pay in the end will depend on several factors, including whether the country you live in imposes taxes on income or investment, or exempts social security benefits from taxation; and whether your total income will bring you above the federal tax thresholds for Social Security benefits and capital gains.

The best advice, said Roy Goldberg, a certified public accountant in California: Consult a tax professional, preferably before you retire, to understand some tax-smart strategies when it comes to earning a retirement income.

I’m making a plan

The EBRI study found that only 4 out of 10 retirees set out their financial goals and wrote a financial plan for themselves during their careers. Among those who have done so, 65% say they have worked with a financial planner.

And this group is the least likely to say that they would change some of their financial habits before retirement to have a better financial situation today.

Among those who said they had used a financial advice professional, 90% said they thought the value they gained from the experience exceeded the price.

But among the group who said they had not worked with a professional, 47% said they would benefit from talking to one during their career.

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