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Dec 21, 2020

You know the old saying, "If it ain't broke, don't fix it?" Well, there are some things that can stand the test of time. But, then there are things that need to be re-evaluated as time goes on. On todays episode, Steve discusses some common retirement planning beliefs that don't hold up so well in todays world! 

  • My Expected Lifespan Is 75-85 Years.  Yes, the average life expectancy is in this range, but that’s irrelevant to any one person.  Half the people will live longer than the median, and you’ll hope to be part of that group.  The chances of you dying at an “average” age are slim.
  • I’ll be in a lower tax bracket when I retire.  We have a serious debt and spending problem, so the odds are good that tax brackets will be rising instead of falling.  Also, remember that the tax-deductible money you socked away in your 401(k) will become fully taxable during retirement.
  • My overall expenses will be lower in retirement.  Some expenses may be lower, but others will be the same or even higher during retirement.  For example, as you age, your health tends to decline, so you could face higher medical bills. 
  • I won’t outlive my money if I withdraw 4% a year.  Anything could happen that might give you no other choice but to withdraw more than your planned 4%.  Treat the 4% rule as a general guideline, and always prepare for the worst.
  • I’ll live off my pension.  Many state pension plans are underfunded and that could affect your retirement income.  If your employer goes bankrupt, the Pension Benefit Guaranty Corporation protects your pension.  But it’s possible you might not get every dollar you expected.


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