Retirement Savings Lessons That 86% of Workers Learned Too Late

Preparing for retirement involves careful planning and diligent saving, and most Americans wish they had done something differently when it comes to the latter. A recent Clever Real Estate survey found 86% of workers have regrets about their retirement savings, with many saying they made missteps around when they started, how much they saved or how they invested.

Here are the most common retirement savings regrets.

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Waiting Too Long To Start Saving for Retirement

More than 1 in 3 U.S. workers (35%) wish they had started saving for retirement sooner, making it the most common retirement savings regret.

"It is a mistake to wait to start saving for retirement because you miss out on the power of compound growth over time," said Robert Baird, wealth manager at Cornerstone Financial Services in Southfield, Michigan. "The longer you wait to invest, the less time your money has to compound and work for itself. That means that you must contribute and save more money later than you would if you had started sooner."

Ideally, workers should start saving as soon as possible so that their money can grow for as long as possible.

"Even if you can only afford to save a little, you still should because over time with compound growth, small initial savings can lead to a large sum available to utilize in retirement," Baird said.

Not Contributing Enough to Retirement Accounts

Even workers who started saving early often wish they had increased their contributions sooner. Nearly a third of workers (31%) regret not contributing more to their retirement savings accounts.

"Workers should aim to contribute, on average, about 15% of their income to retirement, and ideally grow that to 25% over time," Baird said. "This will allow the worker to build up enough savings so that they may replace their working income in retirement and be able to maintain their lifestyle."

Many people can't reach 15% right away, but it's something they can work up to.

"It's important to not let perfect be the enemy of getting started, regardless of age," said Zack Bernsdorf, founder and financial advisor at Aspire Capital Management, LLC in Columbus, Ohio. "Contribute up to your employer match, then aim to increase your savings rate by 1% every year or with every raise."

Investing Too Conservatively for Long-Term Growth

Twenty percent of workers believe they invested too conservatively and missed out on gains.

"Determining the appropriate amount of risk a worker should take with their retirement savings should be based on a few factors, but the main two are time horizon and personal risk tolerance," Baird said.

Younger investors generally have more time to ride out market downturns, which can make growth-oriented investments more appropriate.

"Having time on their side will allow that investor to invest their money through all types of markets," Baird said. "They should keep saving and investing even in bad markets, which generally scare investors away."

Investors nearing retirement, however, often need a more balanced approach that prioritizes both stability and continued growth.

"A mix of stocks, bonds and cash would be important for an investor in this position," Baird said.

Personal risk tolerance also matters.

"If an investor is kept up at night worried about their investments, they are likely too aggressive, even if they have a long time to invest," Baird said. "Knowing yourself and knowing how you might react to a bad market is an important factor in determining the appropriate risk an investor should take."

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.