Never Assume In Retirement Planning

Today's Question:

Making an assumption about something gets us into trouble (and makes a you-know-what out of you and me). How about common assumptions when it comes to retirement? Should we continue to believe them or look a bit deeper? Nathan talks us through these four retirement planning assumptions.

Check out the full show notes for this episode: https://thefinancialanswer.com/never-assume-in-retirement-planning

In The News

2:24 In the News: The Numbers

• According to a survey, 7 percent of Americans think chocolate milk comes from brown cows.
• Many people think they will win the lottery one day and that is their retirement plan (it’s not a plan).
• The DOW has been sliding for several weeks but is coming up again and back in the green.

Confidence Corner

6:46 Assumption #1: A Roth IRA Will Save Money In The End

• For most young people that is the case, but it’s not always true for everyone.
• For younger, high-income earners it might make more sense to defer the taxes until retirement when you won’t be making that high income.
• It’s worth checking with an advisor.

8:37 Assumption #2: Delaying Social Security Will Yield More

• There’s a breakeven point to this, typically between 75 and 80 years old.
• Look at your own situation and your health to see if it makes sense to delay.
• Social Security is going to have change systematically, but we don’t know what will happen.

12:22 Assumption #3: Bonds Will Create a Safer Portfolio

• Bonds create volatility if they are longer term and don’t necessarily create safety.

13:31 Assumption #4: Taking The Lump Sum Option On A Pension Is Best

• You need to look at your entire situation. It is not always best to take the lump sum.
• Sit down with an advisor and make a plan with your spouse.
• A lump sum may be the best option, but a lot of times Nathan has recommended the pension option.
• Your market investments don’t have a guarantee, so a guaranteed income is nice in certain situations.
• Make sure you do the right thing for your unique needs.

 

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