August 9, 2017

5 Retirement Myths You Should Ignore


Being human, we tend to look for simple solutions to complex problems. We accept "common wisdom" rather than do the hard work necessary to find answers for ourselves. 

What follows are five myths about retirement: beliefs that are comforting and sound logical, except, they are not true. Ask yourself how many you have fallen for, how many affected your retirement planning and lifestyle.


1) It will all work itself out


This has to be the most dangerous of the untruths we tell ourselves. With the typical 50-something American having less than $100,000 set aside for retirement, the next 30 years of your life will not magically work itself out.  No matter how generous a pension might be, or how much Social Security is likely to pay you each month, you are not going to have a satisfying retirement on a savings account that produces less than $300 a month of additional income. 

Think of your retirement as a complex machine with lots of moving parts, and one of them is financial. It is absolutely true that you can't know exactly how much money you will need during your retirement. But, any reasonable projection will start with the assumption that you need to have quite a bit more than that to a shot at a comfortable retirement. 


2) My retirement plans are based on solid, proven advice. I'm good to go. 


We are lucky. There are tremendously helpful resources available to us. The Internet can provide advice, planning scenarios, financial calculators, and income projections. Thousands of retirement blogs have all sorts of opinions. Investment counselors are a phone call away.

Sounds great, but it isn't enough. Your plans have one serious flaw: they will turn out to be wrong some of the time. Nothing can prepare your financial ship for another massive recession. There are no firm guidelines for handling a major stock market retrenchment. You may be just one major healthcare crisis away from kicking your plans into the gutter. You are not set. Retirement is a crash course in on-the-job-training. Base your planning on flexibility as well as solid advice. Plans are important, but they aren't infallible.


3) My spouse will welcome all my ideas and help


Maybe, maybe not. If you have a primary relationship that involves sharing space with another, be prepared for a time of adjustments and negotiations. The temptation is to analyze and then fix all the things that aren't being done properly. Having all that free time means you can bring your organizational skills to bear on the parts of home life that aren't operating at peak efficiency.

If that last sentence sounds like something from your work environment, that is the problem: where you live is not where you once worked. The person who shares space with you has not read, or even accepted the same playbook. There must be a time of compromise. Walk gently and talk softly as each of you figures out the best mix of talents and desires.


4) Boredom is bad - Avoid at all costs

I will quickly qualify:  Boredom is really bad if that defines most of your retirement lifestyle. But, in small does boredom helps push you to whatever is next. Boredom is actually good as an occasional motivator.

Let's say you have just finished something that has been a real passion for you: maybe completing a 10k run, knitting a sweater for a Christmas gift, redecorating the kitchen, cleaning out the garage so you can add a woodworking shop...something that has occupied your mind and energies for awhile.

Then, just like that, you are without an important driver in your life, a project to work on, finish, improve something, or even something as simple as to read a book that has always been on your must-read list. You are bored. Binge-watching Netflix or Game of Thrones becomes the centerpiece of your day. Nothing is really wrong except that spark just dimmed. Boredom sets in.

That feeling you are experiencing can be a powerful motivator to start something new. The feeling of drifting is not pleasant to you so you find something to shatter the boredom and push yourself forward. If you never experience even a moment of boredom you may be moving too fast to know what you are missing.

5) I come from a family with good genes. My uncle smoked until he was 95.

Good news for your Uncle, not all that relevant to you. Of course, your family genes, the pieces of your DNA that help determine your overall health and longevity play an important role in what type of retirement health journey you will experience. But, you are making a serious mistake if you build your retirement around the idea that you are destined for a long life.

The reason a professional athlete spends hours every day practicing his or her particular skill set is to be operating at peak performance. Both muscle memory and physical endurance slip after just a short time away from that repetition. A concert pianist spends 6 or more hours a day at that instrument for the same reason.

Retirement doesn't require that level of commitment to physical and mental conditioning. But, the old adage of "use it or lose it" is quite true for us. Because our cells die or regenerate much more slowly as we age, the need for exercising our bodies and brains remains. To believe otherwise is intensifying a risk with your future that you should not take.


There are more myths than just these five about retirement. Which ones have caused you the most problems?


16 comments:

  1. Retirement and financial planners are quick to ask about travel and second homes in a "better" climate. That just isn't every retiree's reality. People have questions and make assumptions, like - you must be rich if you're retired. Everything is relative, including wealth, boredom, work. There are definitions that are subjective. I also think there's an assumption that retirees have nothing to do so are sitting around watching tv or at a perpetual happy hour. I often wonder what would happen to a community or society if the retired volunteers were taken out of the equation. Life before and after retirement needs to be managed.

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    1. Your comment reflects some of the feedback from the post last week that featured two quotes to ponder. What is one person's path to a satisfying retirement is not another's. Terms like adventure and involvement are subjective. And, your note about volunteers is spot on.

      When I first retired I thought I would want a second home, in Hawaii or the Pacific Northwest. But, as the years passed by, I realized that was a fantasy projected by others. I had no interest in having another major financial obligation and all that comes with it just to own a vacation getaway. I had no interest in being tied down to going to one place.

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  2. Hi Bob! Great post. And if my most recent article on my blog talks about anything, it points out the "myth" that any of us can just "wait and see" what we want to do with the rest of our lives. If we are living for approximately 15-30 years in retirement, it is probably a good idea to design how we want that to unfold rather than just sitting back and reacting to whatever comes along. ~Kathy

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    1. We usually don't let our career just "happen." Why should retirement be any different?

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  3. But I would also like to add that some people, either because of life circumstances or not particularly high wages, are never going to have that half million, or million in retirement funds. I don't think we need to poo poo them or try to scare them to death. If you are lucky enough to have a pension and social security that cover your retirement expenses that that is a huge part of the battle. Some people did not inherit nice estates.

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    1. The typical American retiree is going to incur almost $250,000 in medical expenses after age 65. That creates a huge problem for those on limited means. However, your point is well taken. It is possible to live on Social Security and a small pension, though very difficult, without other resources or family support.

      The first point in this post is meant to draw attention to the dangerous attitude that things will sort themselves out. That just isn't true. If income is quite limited that will require a very strict approach to budgeting and what is possible. That takes real discipline.

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  4. Reminds me of the old adage: those who fail to plan, plan to fail. How do you fail at retirement? Well, I'm not sure, but I think it's when you get truly old and you have nothing to show for it and just wonder . . . what happened to all those years?

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    1. Time seems to pass at double speed, doesn't it. Betty and I have a personal joke about "it being Friday already!" when Monday was just a day or two ago.

      Our life seems endless, in a good way, until a certain point when we realize the end is so much closer than the beginnimg. That's when thimgs take on a new urgency.

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  5. In retirement, as in life, luck plays a big role in how things turn out. We all do what we can, and planning helps, but illness, disability, or job loss can strike at any time over the course of our lives. I haven't had any serious health problems (yet) and didn't have long gaps in employment over my career which allowed me to build up my retirement savings. I sometimes forget how lucky I've been so far.

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    1. Like you, I was able to launch my retirement with most of my bases covered. Until this point health has not been a major concern.

      There have been relatively minor physical hassles that have intruded in our lives this year; Betty and I are spending more time at various doctor offices for various ailmemts. I am begimning to feel like a regular old person, with my weeks defined by appointments.

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  6. Like you and Mona (I think), I once thought about a different climate or a snow bird life. and then I thought again about moving- and decided now warm vacations in the cold months would probably cover it for me, homebody that I have turned into. There's actually an article on Next Avenue, I can't think of it right now, about how all the references and advertising is directed to above middle income, get a second home, travel and play golf retiree-and that many of us are definitely like that-and often f ully by choice.

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    1. Betty and I were talking at dinner last night about our reaction to being home for almost all of this summer with no real escape from the heat and whether we wanted to repeat this approach next year. The answer was, no, though not to be gone for months at a time. We did that with the RV and it is out of our system now. So, like someone who takes a vacation to a warm climate in the winter, we are likely to escape to the cool for a break, now and then. But, at heart, we are homebodies, too.

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  7. #6--You will have time to do all the things you want to do. I was so surprised to find that there are still only 24 hours in the day.

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    1. How true. 24 hours a day goes by much more quickly than you might expect before retirement.

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  8. The days{and years} go by much quicker as your entire life experience is one item divided by the time you've lived. Think of a one foot ruler divided by 12 when you are 12 years old; now divide it by 64 and you see that the days are actually shorter in view of your entire life. I convinced this notion when I hit about 30 and it has proven true to all I've told this - Jim Erickson

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  9. The older you get, the more you realize that life is like a roll of toilet paper. The closer to the end you get...the faster it goes.

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