Songs like Cats in the Cradle and When I Was Your Man make us stop and question ourselves. Might I have been a better parent, or a better partner? 

Songs about regret are super-depressing. Beyond parenting and relationship issues, there are other regrets in life. Money-related missteps can have long-lasting effects. What is your biggest financial regret?

The Great Social Experiment

The Revenue Act of 1978 killed the pension and ushered in a new era of self-funded retirement plans. These employer-sponsored plans provide a pre-tax method to save for retirement, usually with an employer match. In the 45 years since the radical change, the number of U.S. companies providing a traditional pension has plummeted 350%. Today only about 1 in 10 companies provide a pension.

It was the great social experiment. No one knew if the average American could plan and save for their own retirement. Of course there is Social Security, but it was never meant to be a retiree's sole source of income. To maintain the typical American lifestyle in retirement a cash infusion of your own savings is needed to supplement Social Security retirement benefits.

Are we capable of saving for retirement? The same people who overeat even though we know it can make us fat? People who become couch potatoes when we know it can give us heart disease? Drive drunk when we know we could kill someone? Smoke when we know it could give us cancer?

Turns out we can't. For the majority of people, the instant gratification of spending money now outweighs the vague notion that we might retire someday. Less than half of those eligible to participate in their employer’s retirement plan actually do so. Of the minority who do participate, 20 percent aren’t really saving anything, they’re paying back loans they've taken out against their plans.

Biggest Financial Regret

According to a recent Bankrate survey, the biggest financial regret among Americans is not saving enough for retirement. If that doesn’t give you cause for concern, it should.

If you are not participating in your employer’s retirement plan, you need to start immediately. Fill out the forms and begin saving the minimum if that is all you can afford. Set your contributions to increase automatically 2 percent per year. If your employer doesn't offer a retirement plan, you need to open an IRA (Individual Retirement Account).

If you participate in your employer’s plan but can’t say how you arrived at your contribution rate, you can do better. Most people have no idea how much to save.

The best way to plan for retirement is to hire a financial planner or avail yourself to sophisticated retirement planning software. Programs like Eggstack can analyze your finances and provide direct feedback on how much you need to save. There is no excuse for guessing at how much to save when there are better options available.

Conclusion

Develop a plan and monitor it closely so you can make adjustments along the way. You can’t predict everything, but that does not mean you should just guess and hope for the best. Retirement is 20% of your life. You owe it to yourself to make it the best it can be.

Photo credit: Pixabay The Eggstack Blog will never post an article influenced by an outside company or advertiser. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.