You can learn a lot about finances from your parents or grandparents. Whether they teach you good money habits or you learn from their mistakes, your family can play a critical role in laying a solid foundation for your financial future.
You can learn from older Americans’ financial regrets, what they perceive to be their biggest financial blunders, and then work not to make the same money mistakes.
Not surprisingly, the vast majority of Americans — 75 percent — have financial regrets. That’s according to a survey of 1,000 adults conducted by Bankrate. Topping the list of regrets: Failing to save enough for retirement.
Roughly 1 in 5 Americans said their biggest regret is not socking away money for retirement earlier. Among Americans 65 years and older, a whopping 27 percent of respondents said they wished they would have started saving for their golden years much earlier than they did.
Many Americans are notoriously bad about saving their money. A survey last fall revealed that 28 percent of Americans have no money — zero — in savings. Another 1 in 5 Americans admit they don’t even have a savings account.
But things start to get pretty scary when you’re inching closer to retirement and still having nothing saved. In 2014, the Federal Reserve Board said that 1 in 5 people nearing retirement age have absolutely no money saved for their golden years.
If you’re sitting on a zero balance in your retirement account, you could be making a very costly mistake, MarketWatch reports.
A person who starts saving $300 a month for retirement at age 25 (assuming a 5 percent return on investment) will have about $450,000 saved by age 65, despite only contributing $144,000 into his retirement account. Meanwhile, if that person waits until 35 to save the same amount each month, he will contribute a total of $108,000 toward retirement but only have about $250,000 saved at age 65.
In addition to the timing of starting to save for retirement, Americans have plenty of other financial regrets, including the following:
- Not saving for retirement earlier: 18 percent
- Not saving enough for emergencies: 13 percent
- Taking on too much student loan debt: 9 percent
- Taking on too much credit card debt: 9 percent
- Not saving enough for their children’s education: 8 percent
- Buying a bigger house than they could afford: 3 percent
Are you behind on your retirement savings? Check out “6 Ways to Ensure Enough Money for Retirement.”
What is your biggest financial regret? Share your comments below or on our Facebook page.