Americans share their 5 biggest financial regrets

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In many ways, 2023 was a surprisingly good year for the U.S. economy. Inflation cooled, stocks rallied and the Fed promised to start cutting interest rates. And yet, at the start of 2024, many Americans looked back on their finances with regret.

A new study by Forbes Advisor and the research group OnePoll has quantified this remorse. Researchers surveyed 2,000 U.S. adults at the end of 2023, and found that 81.6% of them regretted something about their financial decisions that year. And they didn't take these mistakes lightly — 68% said their mistakes caused them significant stress.

It's an emotion that many financial advisers have seen firsthand, especially from new clients.

"When we meet with clients for the first time … they feel regret on so many levels," said Marianela Collado, CEO of Tobias Financial Advisors in Miami. "Not saving enough, not contributing to their 401(k), not knowing about the power of Roth conversions, not using debt wisely — you name it. The list goes on and on."

Read more: Are pensions set for a big retirement return in 2024?

Respondents told Forbes Advisor about a wide range of regrets. At the top of the list, lamented by nearly one-fifth of Americans, was not saving more for retirement.

"This is typically the biggest regret I see," said Brandon Gregg, a certified financial planner at BBK Wealth Management in Lafayette, Indiana. "In many cases, folks are starting to ask retirement questions as they reach their 40s and 50s when they should have started planning earlier. To complicate things, most are living with higher debt loads than in the past, and it's making saving for retirement a harder thing to grasp."

Others rued paths not taken — for example, not getting a high-yield savings account — and straight-up mistakes — e.g., buying more property than they could afford. Of course, there's nothing an employee — or their adviser or employer — can do to change the past. Instead, shift gears from lamenting the past to preparing for the future.

Read more: 66% believe a retirement crisis is looming

"I tell them hindsight is 20/20, but since we can't go back in time, we just have to make do with what we have now and look forward," said Collado.

Here are Americans' top five financial regrets of 2023:

Not saving enough for retirement

Predictably, older respondents felt this remorse more than younger ones. Forty-three percent of baby boomers chose this as their top regret — more than twice the rate of the whole group.

Another factor, some wealth managers believe, was FOMO. The stock market had a particularly good year in 2023 — the S&P 500, for example, climbed more than 24% — and some Americans wish they'd done more to harness those gains in their 401(k)s. But as advisers can point out to their clients, they still haven't missed out on whatever the market may bring in 2024.

Read more: End-of-year checklist: Update your retirement contributions

"The good news for those people is that even though the best time to start investing was yesterday, the second best time is today," said Ben Lex, a financial advisor at Fiduciary Financial Advisors in Hudsonville, Michigan. "Working with a financial adviser can help make sure you are saving enough, so you don't miss out on the great market growth we saw in 2023."

Not taking advantage of high interest rates

Since the summer of 2023, interest rates have been at their highest level in two decades. But not everyone tapped into these opportunities. According to Forbes Advisor, 15.8% of Americans regret not signing up for interest-bearing accounts, including CDs and high-yield savings. And with prices still rising rapidly through much of 2023, many of those regretful investors watched their savings lose value.

"The failure to take advantage of accounts with higher yields ties in directly with inflation," said Andrew Van Alstyne, a financial advisor at Fiduciary Financial Advisors in Waxhaw, North Carolina. "Those who have left buckets of money in a traditional, low-interest-rate savings account have literally seen their purchasing power get decimated over the past year to 18 months."

Taking on too much credit card debt

Third on the list of laments was racking up too much credit card debt; 14.8% of Forbes' respondents said this was their top financial mistake in 2023. This is not only a regret, but a growing national problem. By the end of 2023, Americans held a total of $1.13 trillion in credit card debt, according to Federal Reserve data

And like many other problems, it's been made worse by inflation.

"I've seen a big influx of folks asking for help with budgeting and debt reduction plans," Gregg said. "I believe this has especially ballooned for many as prices on most anything has significantly gone up."

Read more: 10 states with the highest student loan debt

Depending on the size of the debt, this can be a very difficult hole to dig oneself out of. But advisers can help — both practically and psychologically.

"The biggest step is putting a plan in place," Gregg said. "A financial adviser can objectively work through specific spending behaviors, devise a plan that fits the clients' lifestyle and come up with a plan for implementation. This provides folks with accountability and relief from pressure that they must do it on their own."

Not saving enough for emergencies

Retirement wasn't the only thing Americans failed to save for. Many felt they didn't set enough aside for emergencies, with 13.1% saying this was their biggest regret in 2023. And as some wealth managers pointed out, this regret is often intertwined with all the others.

"A lack of an emergency fund is usually what leads to overextension on credit cards to begin with," said Edward Silversmith, a portfolio manager at Wealth Enhancement Group in Pittsford, New York. "Then you may find it hard to maintain your savings towards any goals."

Read more: Why emergency savings accounts are dominating benefit conversations

And because these problems are "interconnected," Silversmith said, the solution should address the whole picture. The first thing a financial adviser should do, he said, is set the right order of priorities for the client.

"I advise an emergency account right-sized for your household expenses as a prerequisite to some of the other common goals," Silversmith said. "Build your emergency fund, eliminate bad debt with high interest rates, get your employer's match, and then you can think about where your next dollar should go."

Buying too much property

The fifth most common regret is less about what investors failed to do and more about what they did wrong: Buying too much property. According to Forbes' study, 5.9% of Americans said they had bought more real estate and other large purchases than they could afford, and this was their top regret of 2023.

"This is a very dangerous one on my list," said Crystal McKeon, chief compliance officer at TSA Wealth Management in Houston, Texas. "I have seen firsthand that no matter how much money you make, you can find opportunities to spend it if you are not a good steward with your money."

Many of McKeon's clients have left fortunes to their children, she said, that should have lasted decades. Instead, the children quickly spent them down to nothing.

The best way wealth managers can help avoid this problem, many say, is to provide something that's often unpopular in the moment: Discipline.

"While it is human nature to focus on present needs and wants, advisers have a crucial role in helping their clients plan for the long term," said Daniel O'Brien, a CFP at Capital Advisors in Shaker Heights, Ohio. "By providing discipline, structure and education, advisers can guide their clients toward achieving financial goals and securing their future."
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