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Some might argue that a life without at least a few regrets isn’t a life fully lived. It’s not an off-base line of thinking. Humans aren’t perfect. We’re bound to make mistakes and while mistakes aren’t always regrets, the former can beget the latter.
Of course, one of the biggest forms of regret that people contend with over the course of their lives is financial regret. Financial regret can be born out of a variety of circumstances. Paying too much for a clunker of a car. Spending too much around the holidays and not paying off the credit card bill for months or years. Buying an expensive home when interest rates are high. Not buying Apple (NASDAQ: AAPL) when it was $10 or $20 a share.
Many of those regrets can be avoided. So can regret over procrastinating on retirement savings, which is one of the most widely held financial regrets. And that’s certainly a regret that’s avoidable and that avoidance can be assisted by advisors.
Undoubtedly, advisors are pivotal in the avoiding retirement regret scenario because they can dispel misnomers and misconceptions held by clients, particularly younger ones. Some younger people might think they need a lot of money to start saving for retirement and that they can’t afford to because of their entry-level or slightly above salaries. Advisors know the reality and that is a little bit of retirement savings today is better than delaying it for years and years. That’s just one example.
Workers Want to Save Earlier
Delaying saving for retirement is a legitimate regret. Amplifying that scenario is the fact that many folks had good intentions and wanted to get started on it when they were quite young.
A new “consumer research survey that revealed more than half of Americans say they started saving for retirement when they were between 18 to 34 years old — with an average age of 28. However, 64% of Americans wish they had started saving when they were under age 25,” according to Voya Financial.
So if you’re an advisor that’s looking attract more young clients, have the strategies, illustrations, technology, etc. in place to highlight to them the power of setting even small amounts aside today for retirement and how that effort can help them reach their desired retirement lifestyle, perhaps sooner than expected.
The Voya survey indicates that if most people could go back in time, they’d start saving for retirement at 23 years old –basically at their first “real” job, assuming they were in college from 18 to 22. Speaking of younger clients, Gen Z deserves some credit because they’re on the retirement ball. That says advisors are wise to be targeting that group.
“Gen Z had the earliest start on average, reporting they started saving for retirement around 20 years old. Millennials on average started at 24 but wished they had started saving at 23. Generation X and baby boomers started saving for retirement much later than younger generations, with Gen X starting at 30 compared to a desired age of 23,” adds Voya.
Small Steps Can Pay Big Dividends
Nearly everyone wishes they had started saving for retirement earlier. While that implies widely held regret, advisors can ameliorate that situation and can do so without much effort.
For example, the Voya survey indicates many of the workers surveyed aren’t aware of the various retirement resources offered to them by their employers. Those include 401(k)s, healthcare savings accounts (HSAs), and student loan assistance.
Point is advisors don’t have to stretch to help clients avoid regret and kick their retirement savings into high gear.
Related: With Advisor Help, Gen X Can Get on Right Retirement Track