Nearly 3 in 4 Americans have a financial regret, according to a July 2023 survey from Bankrate. 

Some may assume that the most common financial regret would be related to debt, but the survey found that the most common financial regret was not saving for retirement early enough, with about 1 in 5 Americans reporting that not saving for retirement early enough was their biggest money regret. 

Specifically, the survey found financial regrets included:

• Not saving for retirement early enough (21 percent)
• Not Applicable – I have no financial regrets (20 percent)
• Taking on too much credit card debt (15 percent)
• Not saving enough for emergency expenses (14 percent)
• Something else (12 percent)
• Don’t know (6 percent)
• Taking on too much student loan debt (5 percent)
• Not saving enough for children’s education (3 percent)
• Buying more home than you can afford (3 percent)

As it turns out, not saving enough money, whether that be for retirement, emergencies, or their children’s education, more Americans have regrets related to not saving enough (39 percent) compared to those who have regrets related to debt (24 percent), whether that be credit card debt, student loan debt, or buying more home than you can afford. 

“Despite rising debt levels and higher interest rates, regrets over lack of savings continue to outpace regrets related to debt, with more Americans saying their top financial regret was either not saving for retirement early enough, not saving enough for emergencies or not saving enough for a child’s education than those regretting taking on too much credit card debt, student loan debt or buying more house than they can afford,” said Greg McBride, Chief Financial Analyst at Bankrate.

Survey: 3 in 4 Americans Have Financial Regrets

Of those who regret not saving for retirement early enough, a majority, 34 percent, identified as baby boomers or those ages 59-77. A little more than 1 in 4 (26 percent) Gen Xers (ages 43-58) said they regret not saving for retirement early enough, while 11 percent of millennials (ages 27-42) and 5 percent of Gen Zers (ages 18-26) said they regret not saving for retirement early enough. 

Younger generations, who typically won’t worry about retirement for a few more decades, are more likely to regret not having enough emergency savings than they are to regret not saving for retirement early on. Around one in five (21 percent) Gen Zers say not saving enough for emergency expenses is their biggest financial regret, followed by 17 percent of millennials, 13 percent of Gen Xers, and 9 percent of baby boomers.

Less than one-fifth of people of all ages regret taking on too much credit card debt: 18 percent of Gen Xers, 16 percent of millennials, 15 percent of baby boomers, and 11 percent of Gen Zers.

Not only do a majority of Americans have financial regrets, but nearly half, 48 percent, of Americans are stressed out over their biggest financial regret and reported their stress levels are rising due to their financial regrets. 

About 12 percent of respondents with financial regrets reported their stress level decreased, while 40 percent reported their stress levels remained the same, showing that the financial stress we incur when it comes to finances can be overwhelming.

Those who regret not saving enough for emergencies are most likely (56 percent) to say their stress over it has increased over the last year.

Increased stress as a result of a financial regret is more common among younger Americans, as around half of those Gen Zers and millennials with financial regrets say their stress over their financial regret has increased:

• Gen Zers: 60 percent
• Millennials: 57 percent
• Gen Xers: 45 percent
• Baby boomers: 38 percent

Baby boomers and Gen Xers were more likely to say their level of stress over their biggest financial regret stayed the same (48 percent and 44 percent, respectively) since June 2022. That’s compared to millennials and Gen Zers (33 percent and 26 percent, respectively).

How to Lessen Retirement Savings Stress

For many Americans just starting out their career in their early 20s, saving money for your retirement can feel like a low priority, but the earlier you start saving for your retirement, the more money your retirement fund will have due to compound interest. 

In other words, even if you contribute a small percentage of your paycheck to your retirement savings in your early 20s, you may have a larger retirement fund than someone contributing in their 30s or 40s, thanks to the interest that accrues on your 401k every year. 

“The power of compounding has the potential to magnify regrets about foregone savings over time as a ‘what could have been’ realization becomes more stark,” McBride said. “At a modest 6.5 percent annual return, every dollar you put away in your 20s becomes $17 by the time you retire. Of course, every dollar not invested during your 20s is $17 you won’t have in retirement.”

Is there a secret to saving money for retirement? Check out our three tips to start retirement planning below!

3 Steps to Start Retirement Planning

1. Prioritize Saving for the Future as Soon as You Can

Even if you’re in your early 20s or you just began working after college, it’s still important to save for the future. In your 20s, saving 10 percent of your income for retirement is ideal, but don’t worry if that isn’t an attainable figure yet. Save what you think will work within your budget. It may only be a small fraction of your income, but saving every month puts money aside that will grow thanks to compound interest.

If your employer matches your retirement contribution, consider setting aside at least that amount. For example, if your employer offers a 4 percent contribution match, make sure you are setting aside at least 4 percent of your paycheck toward your 401k to take advantage of that employer match. Otherwise, you could be leaving money on the table. 

2. Add Retirement Savings to your Budget

One of the most popular budgeting guidelines is the 50/30/20 rule, where you use 50 percent of your income for expenses, 30 percent for discretionary spending, and 20 percent for savings. That 20 percent is also for retirement savings, so consider allocating at least half of that to your retirement plan. 

Of course, the 50/30/20 rule is ideal, and many Americans have expenses well over 50 percent of their income. Regardless of the percentage you can set aside, make sure to put retirement savings as a non-negotiable line item in your budget so that you get into the habit of consistently saving for your future. 

3. Remember its Never too Late to Save

If you didn’t start saving for retirement in your early 20s and are now in your 30s, 40s, or even 50s, you can still end up with a healthy retirement savings fund, but it will likely require more aggressive contributions than if you had started earlier. For example, in your 20s, it’s recommended to save at least 10 percent of your income for retirement, but in your 30s, that increases to 15 percent. If you are in your 40s, consider saving more than 15 percent or as much as you can. It’s not always easy, but it’s better to start saving for the future later rather than never.