Photo by Vlad Sargu on Unsplash
As people grow older, they tend to be increasingly worried about their financial future. There are good reasons for that, because retirement is actually a synonym to a decrease in income. When the time has come, most people feel sorry for not having worked hard enough in summer to have saved a sum for winter. This is a phenomenon known as “financial regret”. This feeling is quite so indicative of being and feeling financially depressed.
The National Bureau of Economic Research has published a research paper based a survey, which embraced 1,600 elderly Americans. When they were asked whether or not they felt like they should have chosen a better way of saving in youth, almost 60% of them said they did. Also, the survey revealed that wealthy retirees were less prone to financial regret. However, the group of wealthy retired still showed a 40% regret indicator, which is quite substantial. When asked what exactly they would have changed if it would be possible to play it back, most said they’d have spent less money on clothes, vacation, and vehicles.
What was revealed
As the study went on, things would become clear. In fact, these people were blaming themselves form what was not their fault at all. They were facing difficulties not because they had chosen the wrong way of saving, but because they had had to face unexpected events, which would entail massive expenditures. For example, a health problem can take quite a bit of money, and a serious one can simply empty all socks and wallets. They’d have to spend a lot of cash on drugs and medical services while not being able to work and therefore earn money. Other factors include divorce/separation, an accident or disaster resulting in material damage, which could take hundreds or thousands of bucks.
According to sources like Bankrate, LendEDU, which have conducted surveys too, failure to save in youth is one of Americans’ biggest concerns. American Century Investment said that they would place saving skills way above being kind persons and above being able to build decent relationships with other people.
Scientists at the Illinois Institute of Technology’s Chicago-Kent College of Law state that it happens due to the economic reality rather than due to improper saving. To be exact, they do make a mistake, but it is not about saving. As employers in America tend to choose 401(k) saving plans for their employees instead of pensions, employees become increasingly responsible for their elderly financial future. Managing a 401(k) requires quite a bit of experience and skill, so many Americans simply do not have the skill, because they do not get any training on that. Saving is a kind of art, and saving for distant future is a science, which takes years to study – the same old period of time between the youth until retirement.
Therefore, it is not people’s inability to save money, but lack of awareness and authorities’ and/or employers’ inability and/or not wanting to work toward that this awareness.
