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By Dr. Jim Dahle, WCI Founder

Older people are full of wisdom. While not as revered in Euro-American culture as in many, elders simply have more experience than the rest of us, and that experience can be very relevant. History might not repeat, but it often rhymes. So, I pay attention when they talk, especially when 1,000 of them talk.

Business Insider recently did a survey of 1,000 “older Americans” about their regrets. Given the source, it was no surprise that those regrets had a pretty heavy financial tilt. Although not terribly surprising, I found them very relevant to white coat investors. I plan to see what I can do to avoid having those same regrets, and I hope you do, too.

#1 Not Saving Enough for Retirement

The median retirement savings in America is $87,000, although the average is $334,000. If your household is headed by someone 65-74, that average moves up to $609,000. Let’s apply the 4% rule to those amounts and then add in the average Social Security benefit of $21,408 to it to see how much someone could safely spend per year.

• $87,000 × 4% = $3,480 + $21,408 = $24,888
• $334,000 × 4% = $13,360 + $21,408 = $34,768
• $609,000 × 4% = $24,360 + $21,408 = $45,768

Considering the median American household income is now just over $80,000, I don’t find it hard to believe that many retirees, presumably now living on $24,888-$45,768 per year, wish they had saved more for retirement.

If the median American household saved 15% of its $80,000 income for 30 years and earned 5% real on it, it could retire with a portfolio of $797,000 in today’s money. That might not seem like a lot, but it’s 1/3 more than average. If a household got its income up to $120,000 a year and saved 20% of it, that would be $1.6 million, supporting an income of $64,000 + Social Security—more than the median household income.

White coat investors are presumably earning a median income closer to $400,000. Twenty percent of that grows to $5.3 million over 30 years at 5% real. The math is the math. If you want to avoid regrets in your later years, you need to save enough for retirement. The more you earn, the easier that becomes, but trust me when I say it’s not that hard to spend an entire $200,000, $300,000, or even $500,000 of income.

More information here:

Some Sobering (and Scary) Statistics on People’s Retirement Preparedness

How to Start Saving for Retirement

#2 Making Mistakes During the Retirement Process

I found this particular regret fascinating, although it appears from the article and its comments that the main mistake was simply claiming Social Security early. That is almost always a mistake (ill health being the main exception), yet 30% of Americans claim Social Security at the earliest age possible, 62. Only 10% wait until age 70. Delaying Social Security is the only “inflation-adjusted Single Premium Immediate Annuity (SPIA)” you can buy these days, and let’s be honest, most Americans need one. Don’t miss out on your opportunity.

Other mistakes might include failure to do Roth conversions, poor choices around pensions, paying too much for advice, getting bad advice, failing to get needed advice, poor investment selection, bad asset allocation, bad investment behavior, buying too much house, poor debt management, and failing to have a plan for dealing with Sequence of Returns Risk (SORR). You either need to learn to do this stuff yourself or pay a fair price for good advice. Many WCIers who have otherwise done a fine job as their own financial planner and investment manager would benefit from at least a one-time consultation with a fee-only financial planner when approaching retirement. Don’t be penny wise and pound cheap.

#3 Not Making the Right Career Choices

The best career advice I know of is to do something you love, that you’re good at, that does a lot of needed good in the world, and that pays you well. If you do that, it’s hard to say you made bad career choices. Even with good career selection, however, you can still end up with a bad job, work too much or too little, retire too early or too late, fail to negotiate fair pay, or make a plethora of other career-related mistakes.

For now, try to maximize the enjoyment and income you can get from your career, but pass on this knowledge to young people making career choices now. They need to know that many older people really regret their career choices.

More information here:

Will More Money Make Me Happier?

Is Dentistry Worth It? Comparing It to Being a Pediatrician, a Planner, and a Plumber

#4 Not Prioritizing Education Enough

This is probably somewhat related to #3. “I should have been a lawyer, but I didn’t want to go to college and ended up in cubicle hell instead.” Or maybe someone ended up working with their hands in a trade and then found their body was worn out by their 50s, before they had accumulated much. This probably isn’t a huge issue for white coat investors. But taking on too much education is at least as common for this crowd as not getting enough. Doctors can’t seem to resist another fellowship, degree, or certification—even when it doesn’t increase their career enjoyment or income.

There is also plenty of education that is not related to your career. Learning is usually a good thing, and it adds enjoyment to life. Certainly, it makes you more interesting to other people. Docs tend to be lifelong learners. Don’t let that habit stop when you become competent, much less retire.

Regret minimization is an important aspect of building a happy, purposeful life. Learn from the mistakes of others so you don’t have to make all the mistakes yourself. Do what everyone else does and you’ll get what everyone else has, for better or for worse.

**What do you think? What are your biggest regrets? What regrets have you heard from older Americans? **