Rick Edelman, Founder of The Digital Assets Council of Financial Professionals, joins TheStreet to discuss what retirees think is their biggest financial regret.
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00:00What's the most common financial regret you see among retirees right now?
00:05That they didn't start saving sooner.
00:08Everybody wishes they'd started saving in their 20s, and nobody did.
00:12And that's clearly the biggest regret.
00:15And so what advice do you have for those people who are nearing retirement but they feel like they're not ready?
00:23Yeah, it's a real dilemma because we can't rewind the clock, can we?
00:27So if you are among those who regret that you didn't start sooner and that you haven't accumulated as much in savings as you now wish you'd had,
00:35you're going to have to do two things, and you're not going to like either one of these.
00:39Number one, you're going to have to keep working longer.
00:42And number two, you're going to have to throw more money into savings than you may feel you can afford to.
00:48But there's really not much of a choice.
00:50The only third choice is to reduce your expenses.
00:53Not too many people want to do that.
00:54Even getting radical, selling your house and downsizing that major expense, not too many people want to do that.
01:00The fourth option is the one nobody ever does, shorten your life expectancy.
01:05Nobody likes to talk about that.
01:07So we really don't have a choice but to save more, work longer, and make sure you're investing for higher returns.
01:15Because if you're going to take all that extra work, all those extra savings, and put it in a bank account at 3%, you're never going to accomplish the goal.
01:22So you've got to stay invested in the financial markets to have any hope at all of accumulating the money you're really going to need.
01:28So you had four pieces of advice.
01:33Now, when you throw in the cost-of-living adjustments that happen, how does that impact how people prepare for retirement?
01:41Well, we have to recognize that inflation is a fact of life.
01:45We've just gone through four or five years of horrible inflation, and those high prices are going to linger for many, many years to come.
01:52So we have to acknowledge that the cost-of-living continues to rise, and that means our money has to be earning a return higher than the cost-of-living.
02:01So when we look at the returns in the various asset classes, stocks, bonds, real estate, gold, oil, crypto, as well as bank accounts, money market funds, treasuries,
02:13we've got to choose those that have the greatest opportunity for beating the rate of inflation, especially adding in the impact of taxes,
02:22because taxes are a big factor, and they're likely to rise too over the next several years.
02:28So we have to overcome the combination of inflation and taxation to be able to generate a real rate of return.
02:35It makes it more difficult. There's no question about it.