Many retirement-age Americans are facing two significant financial regrets, according to debt expert Ja’Net Adams. Most older individuals realize they have not kept enough in their emergency savings and have not saved adequately for retirement. Adams emphasizes the importance of paying off debts and investing as much as possible into savings and retirement accounts.
She notes that companies moved away from pensions in the 1980s to save money, encouraging workers to invest in 401K accounts. Even those with pensions are advised to save in other accounts to safeguard against the possibility of pension funds going bankrupt. Additionally, those depending on Social Security may need to adjust their budgets and brace for smaller checks in 2025 due to recent interest rate cuts.
The financial landscape for retirees is challenging, underscoring the necessity for proactive financial planning and savings strategies. Adams remarked, “It is a trend that is troublesome because of the millions of Baby Boomers in the United States. It is important to look at how we got here and what can be done to make sure other generations don’t end up in the same situation.”
She highlighted the gradual shift from pensions to 401(k) plans, noting that this trend has deterred consistent retirement contributions.
Retirees navigate financial challenges
“There is not a lot of education from companies around the 401(k), and companies barely motivate employees to contribute to their 401(k) outside of job onboarding with Human Resources,” she said. Adams emphasized that there’s no going backward to pensions, which are costly for employers who are responsible for payments in the employee’s retirement until their death.
Moreover, the pension money isn’t always a guarantee. “Over the last two decades, there have been many stories of pension plans losing all the money in them and employees being left with nothing,” she explained. For Baby Boomers, especially, the time is now — or perhaps yesterday — to work toward retirement financial health.
“Pay down or pay off homes, so that you don’t have those large bills in retirement. If you can, put all the extra money you can find in your 401(k) or other retirement plan, so you can be in the best financial position possible,” Adams advised. Lastly, Adams suggested considering post-retirement work to bring in consistent supplemental income.
“You don’t have to go to work at a department store or fast food restaurant. Go back to your field and consult,” she said.
