5 Financial Lessons of the Past Decade

Retirees explain what they’ve learned over the past 10 years

By SHARE

We’re approaching the end of a decade that may become known for its financial swings and easy credit. But most retirees don’t feel that their lives have improved over the past 10 years. Some 61 percent of retirees say they don’t feel any better off than they were at the beginning of last year and most (48 percent) say they’re feeling cautious about the current state of the economy, according to a recent survey of 602 retirees by Principal Financial Group and Harris Interactive. However, many retirees say they’ve learned important financial lessons that they will carry into the next decade. When asked about the single most important financial lesson they’ve learned from the past 10 years, retirees responded:

[See America's Best Affordable Places to Retire.]

Have an emergency fund. In case of unforeseen illness, disaster, or job loss, 22 percent of retirees say an emergency fund is more essential to the future than ever before.

Pay off debt. Debt costs you more money in the long run than saving up for a desired purchase. Some 21 percent of retirees learned the extreme importance of paying off debts on time or avoiding them altogether.

Diversify investments. Retirees who didn’t diversify their investments, especially if they took on more risk than they could really afford, are paying an extreme price for it now. Just over one in 10 retirees (12 percent) say the lesson of the decade is to spread your money over several asset classes to hedge your bets.

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Save for the long term. Many retirees wish they had saved more money during their working years (9 percent). Unfortunately, if you realize you haven’t saved enough only after retirement your only choices are to go back to work or learn to get by on less.

Don't rely on credit cards. When you get a health bill not covered by your insurance or your roof starts leaking, it’s easy to turn to credit cards. A simple swipe of the card and your problem is fixed… until the bills come. Some 8 percent of seniors say they have learned not to rely on credit cards.

[See 10 Resolutions for Retirement Readiness.]

Tell us, have you learned any other financial lessons over the past decade?