Regrets of American Retirees

A new TIAA study reveals that 76% of American retirees have big savings regrets, citing not starting to save earlier in their lives and not putting away enough money overall as primary concerns.

The study also highlights a ‘striking gap’ between retirement and reality, which can lead to severe savings shortages. Regrets were particularly common among younger retirees, with the average study respondent leaving the workforce at age 57. In contrast, future retirees expect to retire at 62.

Lessons Learned from the TIAA Study

The study provides a list of ‘red flags’ that younger retirement savers need to avoid. One of the most critical lessons learned is the importance of planning for all the things you enjoy plus the unexpected. The study also highlights the need to be forward-thinking and innovative with retirement savings.

Underestimating Retirement Savings

Multiple factors contribute to U.S. retiree financial regrets, but some are more equal than others. Insufficient planning is a recurring theme, with nearly half (47%) of TIAA survey respondents regretting not having clear retirement goals. Additionally, 49% expressed remorse over miscalculating healthcare and long-term care costs, while 49% regret not accounting for late working-year financial factors, health issues, career shifts, job loss, and caregiving responsibilities.

The study also notes that unexpected events like a health crisis, family obligations, or a job loss can force individuals into retiring sooner than planned. As a result, younger generations may consider shifting their focus to acquiring multiple streams of income, such as real estate, private lending, and cryptocurrency.

Importance of Working with a Financial Advisor

The study highlights the significance of working closely with a trusted financial advisor. Data from Vanguard shows that advisors can add up to about 3% annually in net returns through behavioral coaching, tax strategies, withdrawal planning, disciplined portfolio management, and stock and fund selection. Compounded over 20, 30, or 40 years, this figure really adds up.

Separate data from a 2024 Northwestern Mutual report shows U.S. adults who partner with an advisor expect to retire at age 64, two years sooner than Americans who don’t work with an advisor. The same study shows retirement saver/advisor teams save twice as much money over the long haul as savers with no professional investing help.

Staying Disciplined and Focused

Younger workers should take heed from the TIAA study and learn from their elders’ regrets and mistakes, especially on how older Americans approached savings in their career years. Experts emphasize the importance of staying disciplined and focused on long-term savings goals.

According to data compiled by Ibbotson Associates, large capitalization stocks (think S&P 500) returned 10.5% compounded annually from 1926-2025. Over the same time period, long-term government bonds returned 5.0% annually, and Treasury bills returned 3.3% annually.

Experts stress that the surest way to build wealth over long time horizons is to invest in a diversified portfolio of common stocks. Someone with a long-time horizon — and people in their 30s have a long time horizon — should not have exposure to money market instruments, yet many investors do because they fear the volatility of the stock market.

What Separates the Prepared from Retirees with Regrets

One big factor that accelerates retirement savings is working closely with a trusted financial advisor. The oversight of a financial advisor helps, and it’s essential to have a second set of eyes to provide guidance and reassurance.

Experts emphasize that the power of compounding and the importance of starting early cannot be overstated. Younger workers should consider working with a financial advisor to create a diversified retirement portfolio and invest in assets that have the potential to produce passive income.