Minimizing Regret in Retirement



Webster defines it as “Feeling sad, repentant, or disappointed over (something that has happened or been done, especially a loss or missed opportunity).”

We all have regrets. Why? Mainly because we are fallen people living in a fallen world (Rom. 5:12). Our regrets may be over something we did or did not do or that we wasted our time, talents, and treasure on things that don’t matter, or not much. Perhaps you can relate; I know I can.

Thankfully, as God’s redeemed people, Christians can have fewer regrets—financial and otherwise—later in life if we follow the instruction the Bible provides, starting much earlier. Our Heavenly Father has lovingly and graciously provided us with commands, guidelines, and boundaries to help us live a life that ends with fewer regrets (2 Tim. 3:16).

Still, God’s grace and mercy also extend to those of us with regrets. Our regrets can be “redeemed“—God can restore what has been lost and use our regretful actions and decisions for our good. He has provided a way to deal with regrets when we have not lived as wisely as he wants us to (Psalm 51:12). Like Paul, as God’s beloved, adopted, and forgiven children, we can put the past behind us and press ahead in faith, following God’s will (Phil. 3:12–14).

God had regrets

It may be helpful to point out that the Bible tells us in a couple of places that God ”regretted” something he had done. But God can’t have regrets, can he? Isn’t he perfect and holy and just in all his ways? What, or why, would he regret?

I have learned that the Hebrew root for the word ”regret” actually means ”to sigh.” Because God is perfect, sighing is more descriptive of a feeling that God experiences. For example, Gen. 6:7 says that he regretted making man. But what that verse means is that he regretted what man had done, how he had rebelled and disobeyed God, not that God regretted creating man in the first place.

The Bible teaches that God knows everything beforehand, so he knew that sin would enter the world with all of its terrible consequences. It didn’t catch him off-guard (1 Pet. 1:20; Eph. 1:4; Isa. 46:9–11). Though he knew it would happen, he was nonetheless grieved when it did (Eph. 4:30).

Human regret is different

We are different from God, of course, so our regret is different from God’s regret. We regret because we make bad decisions and mistakes. Often, it happens due to a lack of wisdom, knowledge, or just plain foolishness, or because we disobeyed God in some area.

We have all made foolish choices; unwise, but not necessarily sinful. They may have been in the areas of lifestyle, education, career, marriage, finances, etc.; the list goes on. In those things, we must look to Rom. 8:28 and trust that God will redeem our bad choices and use them for our good. We can then choose to take the wisdom we have gained to move forward in faith (Phil. 3:13).

Some of our most sorrowful regrets may be due to our sins. We all led sinful lifestyles before we were converted, resulting in unfortunate consequences. These consequences may still be felt long into the future, and if we aren’t careful to view them in light of God’s redemptive grace, they can rob us of our joy and peace.

We must not allow regret over the sins we have committed, which have been covered by the Blood of Christ, to consume our lives. We can instead leave them at the foot of the Cross, repent of them, and ask God to forgive us and restore our peace and joy (2 Cor. 5:17).

Financial regrets

On a practical level, there are a lot of things we might regret. But in the area of stewardship, financial regrets are among the most common that older people have. Most are due to unwise decisions (such as taking on too much debt) or things that we wish we’d done sooner (such as saving for retirement) or later (such as delay Social Security benefits).

Retirement planning is a specific area where many people have regrets. In one study, 55 percent of retirees said they have retirement planning regrets. At the top of the list was that they ended up being too dependent on Social Security (which may imply that they have saved too little or don’t have other sources of reliable retirement income.)

Another 2020 study found, not surprisingly, that the most significant financial regrets that Americans had were not having an emergency fund (20%) and not saving earlier for retirement (19%). (A close third at 18% was too much credit card debt.)

Financial regrets can be debilitating if we focus on them and don’t find a way forward. As I wrote in my latest book Redeeming Retirement:

Regret is understandable but not helpful. As the late Bill Keane, writer of the popular syndicated comic strip, “The Family Circus,” said, “Yesterday is history, tomorrow is a mystery, today is a gift of God, which is why we call it the present.” Or as the character Elsa sings in the hit Disney movie Frozen, “the past is in the past . . . let it go.” (What can I say, I have two young granddaughters.) Better to focus on what you can do now and in the future than dwell on what you didn’t do in the past.

Regret minimization

Practicing “regret minimization” can be a powerful tool for making wise retirement planning decisions. It can also help you make other important life decisions.

Here’s how you might practice it: Imagine yourself sometime in the future long after you’ve made the decision and imagine that it turned out very badly. As your future self, ask yourself whether you still think it was a good decision? Would you make the same decision again? If your future self says, “no, probably not,” then you may want to think long and hard before making that decision in the present.

There are problems with this approach.

How likely is a terrible outcome? If it’s extremely low, your decision may have been a reasonable one. Plus, good decisions can still have bad outcomes. There are so many things beyond our control, variables that we don’t even know about when making a particular decision. In those cases, we may have to be willing to accept a bad outcome if we made the best decision based on the choices we had at the time and the information available to us (limited as it was).

Although some may say it’s just dumb luck, a poor decision that ends well is actually because of God’s sovereign will and his mercy and kindness in sometimes not allowing the result we ”deserve” (Psalm 103:10).

Even though I assume my decision turned out badly, I must also remember that good decisions can have bad outcomes. I can accept bad outcomes if I made the best decision available to me at the time, especially if I sought God’s leading and guidance in making it (Prov. 3:5–6; Psalms 32:8; James 1:5).

Probabilistic decisions, sovereign God

One reason we often make retirement planning decisions we later regret is that many of them are probabilistic. By that, I mean we can make bad decisions that turn out well or good decisions that turn out badly. And we can’t usually predict which one it will be, even if we are fairly confident about them at first.

Complicating things is that our life on this earth and our eventual retirement is a one-time event that comprises hundreds of important decisions. If we could have many retirements and decide with a 90% probability of success, then 90% of our retirements would see a positive result. 

But we only get one retirement. And though it may be wise to “take the bet” with a 90% probability, if we lose (a 10% probability), then 100% of the outcomes (there will only be one) will be bad. If we “lose the bet,” the outcome for our one retirement won’t be bad 10% of the time or only 10% bad.

For example, although you only get one lifetime Social Security benefits claiming decision, you have many other retirement decisions to make. If you choose those with a 90% probability of success, you will likely have a favorable outcome most of the time.

So, the best strategy is to strive to consistently make good decisions (which I would also define as ”prudent” and ”wise”)–what some may call the ”best bets” based on the probabilistic nature of earthly things. We can describe them that way from our perspective, but ultimately there are no ”chance” outcomes involved as we affirm God’s sovereignty and total authority and control over all things. As the late Dr. R.C. Sproul wrote in Does God Control Everything?:

Chance is a perfectly good word to describe mathematical possibilities, but it is only a word. It is not an entity. Chance is nothing. . . This is to say that nothing caused something. . . Everything has a cause, and the ultimate cause, as we have seen, is God.

Social Security regrets

I often advise readers to consider delaying receiving Social Security benefits. That’s generally good advice, especially for those with lower savings balances. Still, the reality is that we can’t know in advance whether delaying will result in a good outcome or not—we can only assess the quality of that decision based on the best information available at the time.

If you have the option of delaying, approaching it in a way that minimizes the likelihood of future regret may be wise.

If you delay claiming and die early, you may regret that you could have received benefits sooner and therefore would have received more benefits in total (at least to the extent to those who are no longer living can have regrets—I’m not sure, but I don’t think there will be regret in heaven, at least not how we experience it on earth).

Alternatively, if you claim early and live a very long time, you may regret your lower monthly benefit amount later in life, especially if you start running short of other income. Widows who must live on reduced survivors benefits long after their husband passes because he claimed early might regret that he/they made that decision whether he does or not.

Social Security claiming regret minimization

One way to look at the Social Security claiming decision is to consider how much you or your surviving spouse would regret that decision in various scenarios and to make a choice based on avoiding scenarios with the greatest regret. This process certainly won’t favor delaying claims for every person in every scenario, but often it will.

For example, suppose you are married and were the higher-earning spouse, claimed benefits early, and died first. In that case, you will have a surviving spouse whose survivor’s benefits may be limited (if they are the lower earner), and that spouse may not regret your decision to delay even if you do regret it in heaven (just kidding).

Then imagine that you delayed benefits and died first. In that case, your lower-earning spouse would receive the largest possible survivor benefit, which you won’t regret (from heaven). She certainly won’t (I discussed this in-depth in my “Love Your Widow” article).

The Social Security claiming decision isn’t the only retirement decision you can make using a ”regret minimization” strategy. Investing decisions, including risk-based asset allocation and diversification decisions, are also good candidates.

Investing regrets

With financial decisions, regret can be subjective (e.g., I wish I had saved or given more), though we can also measure it objectively in dollars. The dollar amount of regret can be defined as the difference between the outcome you expect and the outcome that would have resulted from clairvoyance, i.e., from knowing the best answer. If the best possible strategy would have resulted in a $1000 profit and yours results in $900, you have $100 of regret.

A brilliant guy named Harry Markowitz won the Nobel Prize in Economics for developing Modern Portfolio Theory (MPT). MPT calculates an “efficient frontier” of portfolio allocations that maximizes portfolio returns for various levels of market risk.

Investors and advisors who use MPT come up with an optimal asset allocation (across things like stocks, bonds, commodities, real estate, etc.) based on their risk tolerance, market volatility, risk-free asset returns, and the correlation of the various asset classes.

How did the father of Modern Portfolio Theory allocate the assets in his own retirement portfolio? He didn’t run complex algorithms to compute the historical covariances of the asset classes to decide on an ”efficient frontier.” Instead, he used a regret minimization strategy:

”I visualized my grief if the stock market went way up and I wasn’t in it—or if it went way down and I was completely in it. My intention was to minimize my future regret. So I split my contributions fifty-fifty between bonds and equities.”

As it turns out, a 50/50 allocation falls into the sweet spot of several other research studies. So, Markowitz’s decision to minimize his future regret by splitting his retirement savings account contributions fifty-fifty makes a lot of sense after all.

Investing regret minimization

Now that I’m retired, I’m more of a 40/60 to 30/70 investor. I want to minimize my future regret should there be a major market correction (or crash) during our early years in retirement, which certainly has a greater than zero probability of occurring. I want to minimize the sequence of returns risk that comes with continuing to withdraw from savings that have significantly declined in value.

In other words, I have allocated 65% of my portfolio to bond funds and cash, and the remainder in stock and real estate funds. I want to keep my potential losses from a major market correction at 10% or less, but as it turns out, that may be hard to do in a worst-case scenario. Take a look at this table:

Asset Mix (Stocks/Bonds&Cash) Maximum Historical Annual Loss
30/70 12%
40/60 17%
50/50 22%
60/40 27%
70/30 33%

With a 35/65 portfolio, I could have about a 15% loss based on worst-case market history. That’s more than I’d like, but it wouldn’t be catastrophic. The problem, of course, is that historically low interest rates have made bonds almost worthless (low growth and interest payments), and I may not have enough of an allocation to riskier assets to keep up with inflation and possibly leave a legacy for my family.

Well-known “Boglehead” author and investor Rick Ferri wrote an article titled The Center Of Gravity For Retirees. He argued that a 30/70 allocation is the optimal allocation for retirees, as opposed to the popular 60/40 allocation that is often recommended as a “one size fits all” as it is based on the 4% safe withdrawal rule. (Granted, he wrote it during a time of higher interest rates, but it is still instructive.)

More specifically, Ferri points out that a 60/40 retired investor would have lost 27% during the 16 month period from November 2007 to February 2009. In other words, a 100,000 portfolio would have fallen to $73,346. If you include withdrawals of 4%, your portfolio is now at $68,675, a loss of 31%. (This is the sequence risk I alluded to earlier.)

Applying ”regret minimization” thinking to my asset allocation decisions, I might ask myself this question:

”Would I regret a 15% loss in my 35/65 portfolio less than a 27% loss of a 60/40 portfolio should a similar market event happen in the future.”

The answer is, of course, YES. But the next question is:

”If instead the market continues to rise at an average of 5% to 10% a year, would I regret not being more heavily invested in stocks.”

My answer: ”Perhaps.”

So, another question I might ask myself is, ”Do I think I would regret it enough to alter my asset allocation strategy, perhaps to the 50/50 approach that Dr. Markowitz decided on”?

To answer that question, I first imagined my regret if the stock market continued to rise and I wasn’t as heavily invested as I might have been. Candidly, I’m sure I’d have some regret.

But then I imagined that it crashed like it did in 2007 to 2009 and I wasn’t as heavily invested as I might have dared to be.

I decided I wouldn’t want to be out of stocks altogether as, even though I would have a loss, I also would have missed out on the rising market before the crash (and if I stayed out any eventual rebound). But because I want to minimize my future regret (realizing that the pain of loss is more acute than the joy of gain), my 35/65 allocation seems about right  (If I was more confident in the market’s sustainability given current high valuations, I might go as high as 40/60 or even 50/50.)

Godly wisdom trumps all

There is a biblical principle that decisions may have long-term consequences (Gal. 6:7). That is especially true of retirement planning decisions. Think long and hard about such decisions, pray about them, and no matter what, use Godly wisdom and don’t make decisions hastily or based on emotion (Prov. 19:2).

Regret minimization helps you to think about the possible future implications and outcomes of your actions or decisions. What seems right in the present may have painful repercussions in the future.

On the other hand, it’s also important not to let God-given opportunities get away from you. Make the most of every opportunity for making the right decision and for doing good. Don’t act or decide thoughtlessly, and you may minimize many future regrets (Eph. 5:16–18).


👋 Hi, I’m Chris Cagle, the founder of Retirement Stewardship, a blog that focuses on the various aspects of retirement from a Christian stewardship perspective (1 Peter 4:10).

I write as a retiree who is dealing with the things I write about. I base most of the articles on my research and experience applying it to my situation and how it might apply to yours.

If you’re new here, check out the site introduction for an overview. You can also learn more about me.


My Books

Redeeming Retirement: A Practical Guide to Catch Up (2021)
The Minister’s Retirement (2020)
Reimagine Retirement: Planning and Living for the Glory of God (2019)