What do people regret most when they retire?

One of the biggest blunders people make when it comes to Social Security is claiming a much lower benefit too early. You can increase your chances of not outliving your savings by delaying receiving Social Security benefits, which will significantly increase your monthly check for decades.

But many people can't wait (or can't). According to the Transamerica report, the average age at which retirees begin receiving benefits is 63. Nearly three in ten retirees received benefits at age 62, the earliest possible age, resulting in a much lower benefit. Only a small proportion, 4%, of retirees waited until the age of 70.

Here's how the math works. If you have the flexibility to delay benefits, the increase you get from waiting is significant. By rolling back your benefits from your full retirement age, or FRA (age 66 or 67), until age 70, you earn deferred retirement credits. These amount to an annual increase in your benefit of approximately 8% per year, until you turn 70, after which the credits are no longer accrued.

While there are clearly good personal reasons for filing a claim early, such as poor health or financial constraints, it's often the psychological tug that drives retirees to roll their checks sooner rather than later.

Perhaps the biggest factor is one's psychological ownership of Social Security benefits, according to Suzanne Shu, a professor of marketing at Cornell University.

According to the Transamerica report, nearly half of retirees said debt was a stumbling block that kept them from saving for retirement.

And once they retired, nearly seven in 10 reported having outstanding credit card debt, according to a survey by the Employee Benefit Research Institute (EBRI). That's up from 4 in 10 four years ago.

And a third said their spending in 2024 will be far more than they can afford, almost double that of 2020 respondents.

Sometimes the decision to retire is a regret. About a third of retirees regret not working longer, according to Olivia Mitchell, co-author of a paper published in the National Bureau of Economic Research.

The financial benefits of working past traditional retirement age are clear: more years of earning and saving, not having to invest in retirement savings so those funds can stay invested and grow, and the opportunity to reduce Social Security claiming.

However, sometimes the choice is made for you. More than half of employees surveyed by EBRI retired earlier than expected for reasons beyond their control, such as health problems or disability, or changes in their business such as downsizing, closure or reorganization.

According to Transamerica, nearly six in ten retirees retired earlier than planned. Only 1 in 5 retired early because they were financially able to do so.

Retirees typically regret not preparing emotionally and having a plan for the transition to retirement and what's next, Preston Cherry, a certified financial planner, told Yahoo Finance.

“These provide answers to questions such as: what am I going to do now? How am I going to do it? How am I going to get used to hobbies and get to know myself again?” he said.

“They regret that it took so long to give themselves permission to retire and then break away from an identity they may have been used to – whether it was their corporate or corporate job.”

In general, retirees are happy, have close relationships with family and friends, enjoy life, have a positive outlook on aging, have a strong sense of purpose and have an active social life.

Transamerica data shows that more than four in 10 retirees have experienced improvements in their life satisfaction and happiness since leaving the workforce. Additionally, many actually spend more time with family and friends and pursuing hobbies than they thought possible.

According to Corebridge research, more than half of retired women rate their financial health as good or very good, compared to just 38% of non-retired women.

“One thing that stood out in the data is the fact that retired women were more likely to describe their financial health positively than women still in their working years,” Fielder said. “It's surprising that many women who have retired seem to feel more secure about their finances than women who are still earning a salary.”

The upcoming runway is different for all of us, so creating a life without regrets is no easy undertaking.

“Retirement is very personal,” says Collinson. “People retire at different ages and for different reasons.”

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How about this for a 2025 resolution: “Retirees with financial regrets should create a written financial plan,” Collinson said.

Take into account the costs of living, paying off debt, saving and investing. Then look at how your asset allocation is divided between bonds, cash and stocks so that it is balanced with your risk tolerance, age and goals. Review sources of guaranteed retirement income, health care needs, insurance protection, taxes and the potential need for long-term care.

And don't forget inflation. “Many retirees have been overwhelmed in recent years,” she said. “Hopefully inflation will be back under control, but it will always pose a potential risk to retirees and their purchasing power.”

Only 19% of retirees have a written plan, she added. “But just because you're already retired doesn't mean you can't do retirement planning to know where you stand and give yourself a boost.”

Kerry Hannon is a senior columnist at Yahoo Finance. She is a career and retirement strategist and author of fourteen books, including 'In control at 50+: how to succeed in the new world of work” and “Never too old to get rich.” Follow her further Blue sky.

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