10 Common Retirement Regrets and How to Avoid Them

When we're young, we tend to look at retirement through rose-colored glasses, but when we finally get down to the business of financing it, things can turn dark pretty quickly. It's not easy to prepare for a future with so many unknowns, and there are a lot of ways it can all go wrong.

There's no way to eliminate all risk from your retirement, but you can reduce your likelihood of ending up in a tight spot by avoiding these common retirement savings mistakes.

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If you haven't figured out how much your retirement will cost, you can't be sure you're saving enough. Underestimating your expenses puts you at risk of running out of money prematurely, leaving you to rely upon your children or others for financial support.

Get an idea of how much you need to save by thinking about how you plan to spend retirement. Make a list of trips you plan to take or hobbies you plan to devote more time to and any costs associated with them. Then, list any bills you'll have in retirement and estimate how much those might be. This should help you get an approximation of your annual retirement costs. Plug that information, along with your chosen retirement age and estimated life expectancy, into a retirement calculator to estimate how much you need to save.

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Perhaps the most common mistake people make is putting off saving for retirement. It's not that you can't save enough for retirement if you wait until your 30s or 40s to start. But you make your job harder because you can't count on as much investment earnings. So you have to save more yourself each month.

Begin saving for retirement right now, if you can afford to. It doesn't matter if it's only $10 a month to start. It builds the habit, and every little bit will help you reach your goal. Try to reduce your spending in other areas to free up more cash for retirement, and always increase your retirement contributions when you get a raise.

Your 401(k) match is a bonus your employer gives you for saving for retirement, but if you don't claim it, that money is gone forever. A 401(k) match can give you thousands of dollars per year, depending on your salary and matching formula, and that money could grow into tens or even hundreds of thousands of dollars over a few decades. So it's definitely worth claiming if you can afford to.

Talk to your company's HR department if you're not sure how its matching formula works. Once you know how much you need to save per year to get your full match, see if you can reduce your spending and up your contributions to claim it.

Withdrawing your retirement savings early to cover an unplanned expense will cost you a lot. It's taking money away from your retirement, and you'll also pay a 10% early withdrawal penalty if you're under 59 1/2. There are exceptions to this penalty for large medical expenses, educational expenses, and more, but even if you avoid this, you'll still have to save more going forward each month to retire on your planned timeline.

Make sure you have an emergency fund so you don't have to withdraw money from your retirement accounts when a surprise expense comes up. If you have other financial goals, like saving for a child's college education, keep this money in a separate savings or investment account.

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Going into retirement with as little debt as possible will reduce your risk of running out of money prematurely because you will have fewer payments to worry about. It's especially important to try to pay off high-interest credit card debt if you have any. If you're only making the minimum payment, it can balloon quickly, costing you more in retirement than you planned.

You could use a balance transfer card or just focus on paying down one card at a time. If you choose the latter approach, pay the minimum balance on all of your cards and then put all your extra cash toward the card with the highest interest rate first until it's paid off. Then, move onto the card with the next-highest interest rate. This will help you pay the least overall.

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Healthcare will likely be one of your largest expenses in retirement. You'll have premiums, deductibles, and copays for Medicare, and then there are services Medicare doesn't cover at all, like dental and vision care, hearing aids, and long-term care. Paying for these expenses out of pocket could drain your retirement savings much faster than you expected.

You can prepare for healthcare costs in retirement by looking into additional insurance that covers what Medicare doesn't, like a long-term care policy or a Medicare Advantage plan. You can also save in a health savings account (HSA). Money you put in one of these accounts reduces your taxable income for the year, and if you use it for medical expenses at any age, you won't pay taxes on it at all.

Investing all your money in one or two stocks is a recipe for disaster because if those investments do poorly, you could lose everything. Diversifying your money between many stocks and sectors is crucial to protecting your savings. You should also have some money in safer investments like bonds.

Investing in an index fund is a great way to diversify your savings with a single purchase. Index funds are bundles of stocks that track a market index, like the S&P 500. They're designed to match the index's performance, so when the companies in it do well, you do, too. And they're usually pretty affordable to own, so you don't have to worry about fees taking a huge chunk out of your savings every year.

ALSO READ: You'll Definitely Regret Delaying Social Security Until 70 If This Happens

You might think you're doing yourself a favor by limiting your exposure to stocks, given how volatile they can be over the short term. But stocks can give you much higher returns than bonds over the long run, so you shouldn't avoid them completely, even once you're retired.

The general rule of thumb for how much you should invest in stocks is 110 minus your age. So if you're 60, you should have 50% of your savings in stocks and 50% in bonds or other safer investments. This way, you can capitalize on the higher returns you can get from stocks without exposing your savings to too much risk.

Starting Social Security before you reach your full retirement age (FRA) -- 66 or 67, for most people -- isn't always a bad decision. If you don't think you'll live long or you can't afford to delay, signing up right away at 62 could be a smart decision. But if you live into your 80s or beyond, you'll probably get less money overall by starting early than you would if you'd waited until your FRA to sign up or gone for your maximum benefit at 70.

Every month you delay benefits increases your checks slightly. To find out which starting age could offer you the most money, create a my Social Security account to estimate your monthly benefit. Then, multiply that by 12 to get your estimated annual benefit and then by the number of years you expect to claim benefits to get your lifetime benefit.

Working longer is one of the best ways to shore up your retirement savings if you got a late start. But it isn't always possible. Job loss or health or family issues could force you to retire earlier than you planned. That's why you shouldn't put off saving for retirement just because you think you have plenty of time left to save.

It doesn't hurt to plan for an early retirement, just in case. You don't have to retire if you reach that point and decide you'd like to continue working. But by prioritizing saving early, you will be less likely to run out of money prematurely, even if you have to retire sooner than planned.

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Retirement is supposed to be fun, not stressful. And the best way to ensure it winds up that way for you is to start planning now. You can use these tips to get you started, but you can't just forget about your retirement plan once you've made it. You have to check in with yourself at least annually and alter your plan as your lifestyle and finances change to keep yourself on track.

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