Objective information about retirement, financial planning and investments


7 Retirement Savings Tips to Help Avoid Regret


According to TIAA-CREF’s Ready to Retire Survey “…more than half of people approaching retirement (52 percent) say they wish they had started saving for the future sooner.”    Some key findings from the survey include:

  • “Many respondents say they wish they had made smarter financial decisions earlier in their career, including saving more of their paycheck (47 percent) and investing their savings more aggressively (34 percent).
  • Forty-five percent of participants age 55-64 say financial readiness is the most important factor in determining when they will retire, but only 35 percent say they saved in an IRA or met with a financial advisor.
  • By not making the most of these options, many Americans now feel uncertain about their financial futures, with 68 percent of those approaching retirement saying they are not prepared for what’s to come
  • These retirement savings challenges are causing Americans to reconsider their vision of retirement. Forty-two percent of survey respondents age 55-64 say they plan on working in a part-time job, and 39 percent say they’ll be more conservative about how much they spend on entertainment and other luxuries.” 

Here are 7 retirement savings tips to help you avoid regret as you approach retirement. 

Start early 

If you are just starting out in the workplace, enroll in your employer’s 401(k), 403(b), or whatever type of retirement plan they offer.  Contribute as much as you can.  If there is a match try to contribute at least enough to earn the full matching contribution from your employer, this is free money.  There is no greater ally for retirement savers than time and the magic of compounding.  As tough as it may be to save early in your career put away as much as you can reasonably afford as early as you can afford it.

Increase your contributions 

The maximum 401(k) contribution limits for 2015 are $18,000 and $24,000 for those 50 or over at any point in the year.  No matter what you are currently contributing to your plan try to increase it a bit each year.  If you are currently deferring 3% of your salary bump that to 4% or even 5% next year.  Increase a bit more the following year.  You won’t miss the money and every bit can help fund a comfortable retirement.

Start a self-employed retirement plan 

If during the course of your career you become self-employed it is still important that you save for retirement.  Starting a plan such as a SEP or Solo 401(k) can be a great way for you to put away money for retirement.  You work hard at your own business and you deserve a comfortable retirement.

Contribute to an IRA 

Anyone can contribute to an IRA.  Traditional IRAs are subject to income limits as far as the ability to make pre-tax contributions, but anyone can contribute on an after-tax basis with no income limits.  All investment gains grow tax-deferred you do need to keep track of any post-tax contributions however.  Roth IRAs can also be a good alternative; again there are income ceilings that can limit your ability to contribute.

Don’t ignore old retirement accounts 

Today it isn’t uncommon for people to have worked for five or more employers during their career.  It is important that you make an affirmative decision as to what you with your old 401(k) or other retirement account when you leave your employer.  Leave it where it is, roll it to an IRA, or to your new employer’s plan (if allowed) but don’t ignore this money.  Even smaller balances can add up especially if you have several such accounts scattered about.

By the same token make sure that you stay on top of any pensions that you might be eligible for from old employers.  Make sure these companies can find you and be sure to carefully evaluate any pension buyout offers you might receive from old employers.  These can often be a good deal for you.

Beware of toxic rollovers 

Recently I have read a number of accounts about brokers and registered reps looking for employees of large organizations and convincing them to roll their retirement accounts into questionable investments with their brokerage firms.  Certainly rolling your 401(k) into an IRA via a trusted financial advisor is a valid strategy but like anything else you need to vet the person suggesting the rollover and the investment strategy they are suggesting.

Avoid high cost financial products

Many financial advisors who make all or part of their income from the sale of financial products will often suggest high cost financial products to implement their financial recommendations.  These might include annuities, certain mutual funds, non-traded REITs, and others.  Be leery and ask about the costs and fees associated with these products.  There is nothing wrong with annuities, but many of them that are pushed by registered reps carry excessive fees and have onerous surrender charges.

In the case of mutual funds, index funds are not the end all be all.  But you should certainly ask the advisor why the large cap actively managed fund with an expense ratio of 1.25% or more that they are suggesting is a better idea than an index fund with an expense ratio of 0.15% or less.

At the end of the day starting early, investing wisely and consistently, and being careful with your retirement savings are excellent ways to avoid the regrets expressed by many of those surveyed by TIAA-CREF.

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  1. I thought there were income limits for Roth IRA and anyone could contribute to a traditional IRA?

    • Roger Wohlner says

      Scott thanks for your comment. You are correct, the income limitation on Traditional IRAs only pertains to the ability to deduct some or all of the contribution on a pre-tax basis. Thanks for pointing this out I made a slight change in the wording of that section to hopefully clear up any confusion.

  2. Austintatious says

    Thanks for this excellent list of savings tips to help make retirement better. I do want to offer another and I’m more convinced than ever that it is an important one. Think long and hard about the idea of working a bit longer, if you can. Leaving that job earlier, rather than later, probably amounts to forfeiting the single most effective way to save for retirement. For a variety of reasons, working a bit longer may not be possible but, for those having the “luxury”, be aware that there are plenty of retirees who later wish they’d kept those paychecks coming in a bit longer. Just one more year might make a meaningful difference.

  3. Great post! I recently read a book that you may find interesting titled “Build Wealth and Spend It All” by author Stanley Riggs. This book was very different from other financial planning books I’ve read. The author not only focused on building wealth, but actually outlines plans for, and encourages, spending it! Riggs details his personal experiences with what can go wrong from a life of frugal saving and very smartly teaches us what we can do about it.

  4. Thanks for another clear and informative post! Making retirement savings a priority is key. Being active in learning about different parts of your portfolio and keeping that portfolio diversified is helping me to get closer to financial freedom and the security that I (and many other baby boomers) are looking to have. I recently decided I needed to gain more knowledge regarding my annuity strategies. I found a great book called ‘The Annuity Stanifesto’, by Stan Haithcock. It really motivated me to research my options, and I even was able to reach out to the author himself on his website (www.stantheannuityman.com). Hopefully I’ll be able to enlist his help in the near future. I can’t recommend this book enough.

  5. You have some really helpful financial planning tips here. I can see how something as simple as starting early can help with this. I think the earlier you can start, the better off you’ll be.


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