6 Financial Decisions That Could Haunt You In Retirement


The choices you make with your money can come back to haunt you years later. How much you spend and how much you save during your working years help determine how much you'll have to live on once you retire. Here's a look at six common financial choices you could face and how each could impact your retirement plans and leave you regretting those financial decisions.

1. Money Regret No. 1: Skimping on saving

Not saving enough during your working years is a big mistake that may force you to delay retirement and live less comfortably once you do. Happily, 60 percent of workers feel confident that they're building a large enough nest egg for retirement, according to the Transamerica Center for Retirement Studies. Unfortunately, the coronavirus and recession have shaken some people's confidence: 23 percent of workers say they're less confident in their ability to retire comfortably in light of the pandemic.

If you're among the portion of people who are not so confident, boost your efforts to save for retirement as soon as possible. Start small and work your way up as finances allow. Spending a little less will let you to save a little more. Once you hit age 50, take advantage of higher catch-up contribution limits for retirement accounts: In 2020, you can put up to $7,000 total in traditional and Roth IRAs ($1,000 more than younger workers) and up to $26,000 in a 401(k) or similar employer-sponsored retirement account ($6,500 more than younger workers).

2. Money Regret No. 2: Avoiding the stock market

You might think of stocks as too risky, especially amid recent market turmoil. But skipping stocks completely is not necessarily the answer. One major reason: Investing in the stock market is your best bet for beating inflation. And while the current rate of inflation is low, it likely won't stay low forever.

Even at a low rate, any cash you're stuffing under your mattress is losing purchasing power by that much. Money safely stowed at the bank doesn't fare much better. The interest rate on a savings account is just 0.55 percent, on average, according to Bankrate. By contrast, Standard & Poor's 500-stock index, a widely used benchmark for stock performance, has returned an annualized 10.2 percent, including reinvested dividends, over the past five years through June 19, according to Morningstar.

"Especially in uncertain times like we're seeing now, people might panic and avoid the stock market because they think they cannot afford to lose — and they're right, they cannot afford to lose all their money — but they can't afford to have all their money sitting in cash, either," says Marguerita M. Cheng, Certified Financial Planner and chief executive officer of financial planning firm Blue Ocean Global Wealth, based in Gaithersburg, Maryland.

Considering retirement could last for 30 years or more, given increasing longevity, you want to keep investing for the long haul as you get older. Start as early as your financial situation allows and invest as much as you can afford. A low-cost mutual fund that holds a basket of stocks can be opened for as little as $50. As your nest egg grows, reduce risk as you approach and enter retirement by gradually shifting stock money into more conservative investments.

"People mistakenly get caught up in taking too much risk," says Taylor Schulte, San Diego-based Certified Financial Planner and host of the Stay Wealthy retirement podcast. "I'd rather have someone take less risk and be comfortable, be able to sleep well at night, and be able to stick with their investment plan. That is what's really important in order to have investment success."


Retirement should be spent relaxing, not worrying about finances. Telhio is here to help our members invest and save for retirement. To meet our Wealth Services team, visit
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