What Workers Can Learn From Retirees’ Regrets: Save More Now

The American Dream may have changed since the days of pensions, but one thing remains the same: the desire to retire. Almost half of non-retired Americans (49%) see themselves retiring before age 67, according to a new NerdWallet survey. But they might want to consider whether they’re doing what it takes to reach that goal. More than half of today’s retirees (54%) have regrets about the way they saved for retirement, and their No. 1 regret is not saving aggressively enough.

In a recent online survey of more than 2,000 U.S. adults, commissioned by NerdWallet and conducted by The Harris Poll, we asked Americans who aren’t yet retired when they think they’ll retire. If they don’t think they will, we asked why. We also asked about their current retirement savings.

On the flip side, we asked retired Americans at what age they left the workforce, what regrets they had about their retirement, and how they viewed retirement when they were in their 20s.

Key findings:

• While most Americans who aren’t yet retired do think they’ll be able to retire someday (85%), around 1 in 12 (8%) think they’ll never be able to retire. The top reason? They don’t think they’ll have enough money saved for retirement (54%).

• The amount of retirement savings, on average, of Americans who have started saving and aren’t yet retired is more than $250,000, with a median of $80,000. Roughly half of millennials (ages 23-38) not currently retired (49%) have retirement savings. Among those who do, they have saved $87,000, on average, with a median savings of $20,000.

• Close to 1 in 3 retired Americans (30%) regret not saving more aggressively for retirement. More than half of retired Americans (54%) have regrets of some type when it comes to saving for retirement.

• More than one-third of retired Americans (36%) say it wasn’t their personal choice to retire when they did. Some left the workforce early because their health required them to stop working (18%) or they lost their job and were unable to find another (9%).

Americans think they’ll be able to retire slightly early

We asked non-retired Americans when they think they’ll be able to retire, and the most common answer was between age 60 and 66 (28%), slightly earlier than today’s Social Security full retirement age of 67. Early retiree hopefuls are a smaller group – just 7% of Americans who aren’t currently retired say they think they’ll be able to retire before age 50.

While most non-retired Americans see retirement in their future, 8% don’t think they’ll ever be able to retire. More than half (54%) of that group don’t think they’ll be able to retire because they won’t have enough money saved, while over a third (35%) say they’ll never retire because they’d be too bored without work and almost a quarter (23%) say they haven’t saved anything for retirement.

Gen Zers (ages 18-22) feel more confident than other generations about their ability to retire. A full 95% of non-retired members of Generation Z think they’ll be able to retire, compared to 86% of millennials, 85% of Gen Xers (ages 39-54) and 82% of boomers (ages 55-73). While it’s probably easier to feel more confident about retirement when you’re further away from it, ideally this also means they’ll start to save earlier than their older counterparts.

Average savings balance exceeds $250K; median lags at $80K

More than half of non-retired Americans have something saved for retirement (51%) – an additional 26% preferred not to answer this question – and among those who are saving the average balance of this savings is roughly $254,000. The median savings is much lower, however, at $80,000, and almost 7 in 10 Americans who aren’t retired but have money saved for retirement (68%) have saved less than $250,000.

Among those not currently retired, men are more likely to have retirement savings than women (59% vs. 43%), and the men who have saved are also slightly more likely to have saved more, on average, than their female counterparts ($279,000, on average, vs. $220,000, on average). This may be a problem because statistically, women have longer life expectancies.

Almost half of millennials who aren’t currently retired say they have something saved for retirement (49%), and among them, they have $87,000 in savings, on average. This is a good chunk of savings, particularly if millennials keep consistently saving until retirement. Let’s say a millennial starts with this $87,000 and puts an additional $6,000 – the current maximum annual IRA contribution – away for retirement each year through age 66.

Depending on the millennial’s age, with a 6% annual return, these contributions could grow this balance to between $913,000 and $2.3 million. For a middle-aged millennial of 30, they’d have $1.5 million saved for retirement.

“Some Americans — including millennials — report strong progress toward saving for retirement, which is great news,” says Arielle O’Shea, NerdWallet’s investing and retirement specialist. “But it’s also worth noting that these figures report balances among those who have retirement savings. As our research found, many Americans don’t, and that’s a problem.”

Non-retired Americans can learn a lot from retirees

In addition to talking to those who aren’t yet retired, we asked retirees about retirement regrets, when they left the workforce and whether it was their choice to retire when they did. Here’s what retirement hopefuls can learn from those who’ve already taken the leap:

They retired early: Retired Americans’ average retirement age was 59.1 – the median age was 61 – meaning they retired earlier than the traditional retirement age of 67 (or even the previous traditional retirement age of 65). More than 2 in 5 retired Americans (42%) retired before the age of 60.

They thought they had plenty of time to save: When you’re in your 20s, retirement seems ages away, which may lead Americans to put off saving for retirement. More than 1 in 5 retired Americans (22%) felt this way: they say when they were in their 20s, they figured they had plenty of time to save for retirement when they were older. Around 1 in 8 (13%) say when they were in their 20s they enjoyed working so much they didn’t think they would want to retire.

They have retirement regrets: More than half of retirees (54%) have regrets of some kind about saving for retirement. The biggest ones? Not saving more aggressively (30%) and not starting to save sooner (29%).

Retirement isn’t always a choice: More than one-third of retirees (36%) say it wasn’t their personal choice to retire when they did. Almost 1 in 5 (18%) say their health required them to stop working, and about 1 in 10 (9%) say they lost their job and were unable to find another. An additional 10% say that they had to retire sooner than planned for another reason.

How to get ready for retirement

Save now, save more: Easy enough to say, but seeing as retirees’ top regrets are not saving aggressively enough and not saving earlier, it’s important nonetheless.

“The earlier you start saving, the less you have to save overall because your investments will be super-charged by compound interest. Over a long period of time, that can add hundreds of thousands of dollars to your balance,” says O’Shea.

If you aren’t saving yet, start as soon as possible. If you’re saving some but not enough, increase your savings, even by just a percent or two. Add savings into your budget, cut expenses that aren’t important to you, and redirect these funds into your retirement account.

Even if you don’t plan to retire, save for it anyway: More than a third of retired Americans (36%) didn’t choose to retire when they did, and 13% say that when they were in their 20s they assumed they’d never want to retire. Save, regardless of whether you think you’ll need those savings. If nothing else, this nest egg will give you options.

Figure out how much you want to save for retirement and work methodically toward that goal: It’s difficult to figure out how much to save now if you don’t know where you want to end up later. Determine how much you need for your golden years, and use a retirement calculator to see how much you should be saving each month to accrue that amount.

“Even if you can’t save the suggested amount right away — and many people can’t — it’s helpful to have a goal you can work up to,” says O’Shea. “Increasing your savings when you get the opportunity — after a raise or bonus, when you eliminate an expense like a debt payment — will get you there over time.”

Choose a retirement savings account or two: Many Americans have access to a 401(k) or 403(b) through their workplace, but these aren’t the only savings vehicles available. You can open a traditional and/or Roth IRA, and if you’re self-employed, you may be able to open a SEP IRA, a SIMPLE IRA, and/or a Solo 401(k).

Survey methodology