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Whether it’s taking on too much debt or not saving for the future, anyone can make a financial choice that they later regret.
Around three in four (74 percent) U.S. adults have a financial regret, according to a new Bankrate survey. Most commonly, Americans regret not saving for retirement early enough (21 percent), taking on too much credit card debt (15 percent) or not saving enough for emergency expenses (14 percent).
The Fed paused its repeat interest rate hikes in June, but two more may be coming this year. Amid Federal Reserve interest rate increases, a cumulative 39 percent of Americans regret not saving enough, whether it’s for retirement, emergencies or their children’s education. That’s more than the 24 percent of people who have debt regrets.
“Despite rising debt levels and higher interest rates, regrets over lack of savings continue to outpace regrets related to debt, with more Americans saying their top financial regret was either not saving for retirement early enough, not saving enough for emergencies or not saving enough for a child’s education than those regretting taking on too much credit card debt, student loan debt or buying more house than they can afford.”
— Greg McBrideBankrate Chief Financial Analyst
Bankrate’s insights on American financial regrets
- More Americans regret not saving for retirement than taking on too much debt or not saving for emergencies. 21% of U.S. adults say their biggest financial regret is not starting to save for retirement early enough. That’s more than the 15% of people who regret taking on too much credit card debt and the 14% of people who regret not saving enough for emergency expenses.
- Baby boomers are most likely to regret not saving for retirement early enough. 34% of baby boomers (ages 59-77) regret not saving for retirement early enough, more than the 26% of Gen Xers (ages 43-58), 11% of millennials (ages 27-42) and 5% of Gen Zers (ages 18-26) who feel the same.
- Nearly half of Americans have grown more stressed over their biggest financial regret since last year. 48% of U.S. adults with at least one financial regret say their stress level over their top financial regret has increased in the past year, four times as many people as the 12% who say their stress level has decreased.
- Younger Americans are more stressed year-over-year as a result of financial regret. 60% of Gen Zers and 57% of millennials with financial regret say their resulting stress has increased since June 2022 — 45% of Gen Xers and 38% of baby boomers say the same.
Roughly 1 in 5 Americans’ top financial regret is not saving for retirement early enough
Saving for the future sooner, rather than later, means the money in your retirement fund will grow due to compound interest, or interest payments that increase your savings every year. While not everyone saves for retirement early in their working years, many regret it — 21 percent of U.S. adults say their biggest financial regret is not saving for retirement early enough.
“The power of compounding has the potential to magnify regrets about foregone savings over time as a ‘what could have been’ realization becomes more stark,” McBride said. “At a modest 6.5 percent annual return, every dollar you put away in your 20s becomes $17 by the time you retire. Of course, every dollar not invested during your 20s is $17 you won’t have in retirement.”
Another 15 percent of Americans most regret taking on too much credit card debt, and 14 percent most regret not saving enough for emergency expenses:
Source: Bankrate survey, June 12-15, 2023
A small percentage of people say their biggest regret is taking on too much student loan debt (5 percent), not saving enough for their children’s education (3 percent) or buying more home than they can afford (3 percent). One in five (20 percent) of people don’t have any financial regret at all.
Baby boomers are most likely to regret not saving for retirement early enough
Baby boomers, most of whom are around retirement age, are the most likely generation to wish they had saved earlier in life. Around one in three (34 percent) baby boomers regret not saving early enough for retirement, more than the 26 percent of Gen Xers, 11 percent of millennials and 5 percent of Gen Zers.
Younger generations, who typically won’t worry about retirement for a few more decades, are more likely to regret not having enough emergency savings. Around one in five (21 percent) Gen Zers say not saving enough for emergency expenses is their biggest financial regret, followed by 17 percent of millennials, 13 percent of Gen Xers and 9 percent of baby boomers.
Less than one-fifth of people of all ages regret taking on too much credit card debt: 18 percent of Gen Xers, 16 percent of millennials, 15 percent of baby boomers and 11 percent of Gen Zers.
Nearly 1 in 2 Americans have grown more stressed over their top financial regret over the past year
Financial regrets have commonly become more stressful for many Americans over the past year: Among those with financial regrets, nearly one-half (48 percent) say their stress level over their top financial regret has increased at least somewhat since June 2022. Only 12 percent of these people say their stress level has decreased at least somewhat in that same time. Most commonly, 40 percent of these people said their stress level over their financial regret has stayed about the same in the last year.
Source: Bankrate survey, June 12-15, 2023
Note: Percentages are among those who have a financial regret
Increased stress as a result of a financial regret is more common among younger Americans, as around half of those Gen Zers and millennials with financial regrets say their stress over their financial regret has increased:
- Gen Zers: 60 percent
- Millennials: 57 percent
- Gen Xers: 45 percent
- Baby boomers: 38 percent
Baby boomers and Gen Xers were more likely to say their level of stress over their biggest financial regret stayed the same (48 percent and 44 percent, respectively) since June 2022. That’s compared to millennials and Gen Zers (33 percent and 26 percent, respectively).
Those who regret not saving enough for emergencies are most likely (56 percent) to say their stress over it has increased over the last year.
4 steps to start retirement planning
It can seem like a low priority to begin saving for retirement when you’ve only just started working, but 21 percent of Americans say their biggest regret is not beginning to save for retirement sooner. Here are a few ways to start saving for retirement sooner, rather than later:
1. Prioritize saving for the future as soon as you can.
Even if you’re only in your 20s, or you just began working after college, it’s still important to save for the future. In your 20s, saving 10 percent of your income for retirement is ideal, but don’t worry if that isn’t an attainable figure yet. Save what you think will work within your budget. It may only be a small fraction of your income, but saving every month puts money aside that will grow thanks to compound interest.
2. Work saving for retirement into your budget.
One of the most popular budgeting guidelines is the 50/30/20 rule, where you use 50 percent of your income for expenses, 30 percent for discretionary spending and 20 percent for savings. That 20 percent is also for retirement savings, so consider allocating half of that to your retirement plan. No matter how you split your budget, making retirement savings a consistent priority in your monthly budget early is a great habit for the future.
3. Consider your retirement savings options.
Between an employer-sponsored 401(k), a traditional IRA, a post-tax Roth IRA, stocks or other investments, there are a lot of options to save for retirement. Choose the plan that’s best for you depending on your budget and priorities, or put money into multiple plans to diversify your retirement savings. Calculate how much you need for retirement to consider the options that are best for you.
4. Remember you can still catch up.
If you haven’t started saving for your retirement until your 30s or later, you can still catch up if you save aggressively, ideally at least 15 percent of your income. If you hit your 40s, you may want to save as much as you can, even more than 15 percent. It’s not always easy, but it’s better to start saving for the future late, rather than never.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 3,684 U.S. adults, including 2,752 who have a financial regret. Fieldwork was undertaken between 12th – 15th June 2023. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+). The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.