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
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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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