Personal Resource Center

Steering clear of retirement regrets

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If retiring early means claiming Social Security benefits before you reach full retirement age, your benefits may be reduced by up to 30%.

Let's say you were born in 1962 and started claiming Social Security in 2024 at age 62. If your monthly benefit at full retirement age would have been $1,000, you'd receive just $700 per month instead.

On the other hand, delaying retirement can increase your monthly benefit by up to 24%.5 So if your monthly benefit at full retirement age would have been $1,000 but you waited until age 70 to start claiming benefits, your monthly benefit would be $1,240.

If retiring early means you need to tap into your retirement accounts early, you'd also be depleting your accounts more quickly and missing out on years of compounding returns.

Finally, depending on how early you need to tap your retirement accounts, you may also need to pay a hefty penalty to the IRS. The federal tax code levies a 10% penalty on any withdrawals from a traditional IRA or 401(k)6 before you reach age 59½. So if you plan to tap your savings in those accounts, you should wait until you're at least that age to retire.

Not planning adequately for health care costs

Another common mistake is failing to plan for out-of-pocket healthcare costs in retirement. The average, healthy 65-year-old couple will spend $662,156 on healthcare costs throughout retirement,7 according to data from HealthView Services. That's why it's critical that you factor medical expenses into your retirement savings plan.

While Medicare does help cover a portion of retirement medical expenses, it doesn't cover all of them. Many new retirees are surprised to find that they must pay for many common health care costs out of pocket, including most dental care, eye exams, hearing aids and routine physical exams.8

You can also enroll in a Medicare Advantage Plan or Medicare Supplemental Insurance (Medigap) in retirement to help cover some costs that regular Medicare doesn't cover. Just keep in mind that this requires paying additional premiums.

Not buying long-term care insurance

Another cost not covered by Medicare is long-term care, so many retirees struggle to pay for these types of expenses.

Long-term care insurance helps cover the costs associated with such needs, including nursing homes, assisted living facilities, and home health care.9 Without this kind of insurance, you must pay for these expenses out of pocket — which strain even the most carefully planned retirement budget and leave less for your surviving spouse or children to inherit.

To avoid this regret, consider purchasing long-term care insurance as part of your overall financial plan.

Everyone should have the retirement of their dreams, but it doesn't happen by accident. Proper planning now makes all the difference in your experience later on, so take control of your future and ensure you take all the steps necessary for a successful retirement. If you need help navigating the process, a Synovus financial advisor can work with you to build a retirement plan and create a strategy for your unique situation.

*Diversification does not ensure against loss.

Important disclosure information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. Marianne Hayes, “Best Ways to Invest Your Money at Every Age," Experian, published November 28, 2022, accessed March 9, 2023. Back
  2. Abigail Hurwitz and Olivia S. Mitchell, “Financial Regret at Older Ages and Longevity Awareness," National Bureau of Economic Research, revised December 2022, accessed March 9, 2023. Back
  3. Social Security Administration, “Early or Late Retirement?" accessed March 9, 2023. Back
  4. Social Security Administration, "Starting Your Retirement Benefits Early," accessed March 10, 2023. Back
  5. Social Security Administration, "Benefits Retirement Planner," accessed March 10, 2023. Back
  6. IRS, “Retirement Topics – Exceptions to Tax on Early Distributions," updated September 19, 2022, accessed March 9, 2023. Back
  7. HealthView Services, “2021 Retirement Healthcare Costs Data Report," accessed March 9, 2023. Back
  8. Medicare.gov, “What's not covered by Part A & Part B?" accessed March 9, 2023. Back
  9. Medicare.gov, "Long-term care," accessed March 10, 2023. Back