Retirement is a milestone almost everyone experiences. When you reach it, you want to enjoy the fruits of your labor in your later years. Unfortunately, not everyone gets that chance. In fact, far too many Americans dread the day they'll have to leave the workforce because they're worried about how to survive financially once paychecks stop coming.
So how can you tell if you'll end up as one of the millions of retirees with major financial regrets? Watch for these three big red flags suggesting this will be your fate.
1. You haven't set retirement savings goals
You'll need savings if you don't want to struggle in retirement -- Social Security alone can't support you. To have enough for financial security, you must invest enough throughout your life. But if you don't know how much enough is, it's very likely you'll miss your target.
Without a clear goal, it's impossible to know if you're on track and difficult to stay motivated to make the sacrifices necessary to save. Far too many Americans haven't determined how much to save or what their deadline is. To make sure you aren't one of them, follow a few basic steps to set your goal.
2. You aren't taking all the costs of retirement into account
As a retiree, you'll probably face many expenses you aren't really planning for.
Many Americans neglect to consider how much they'll spend on healthcare services, helping their families out, or long-term care. These expenditures alone can add up to thousands of dollars (or even hundreds of thousands) every year. Be realistic about all the essential expenditures you'll be responsible for when you set your retirement goals, so you don't underestimate what you'll need.
3. You plan to work in retirement
For many retirees, doing some work in retirement is a great thing. It provides extra money and keeps you active and engaged. The problem comes, however, if you're basing your plans around the assumption you'll get a paycheck. You cannot count on earnings from a job because there's always a chance you won't be able to work for some reason such as a lack of opportunities or health issues.
If you've saved too little to support yourself without a paycheck and it turns out you can't earn one, you're going to have serious financial problems. To avoid this, anticipate giving up work entirely at 62 (and claiming Social Security then) even if your goal is to stay in the workforce for longer. You'll be ready if your plans don't work out, and will have extra money to enjoy if they do.
The last thing you want is to end up with retirement regrets when it's too late to do anything about them, so consider all potential retirement costs, anticipate a retirement without a paycheck, and set your retirement savings goals ASAP so you won't be looking back and wishing you'd made different choices.