1. Retirement is an age or a year.  First, I’m not a huge fan of the word retirement but that’s a rant for another time.  Almost no one retires the year or age they plan to whether job change, health change or global pandemic.  Also, what other major life event do we plan a year for?  Prior to meeting our future spouses do we set a year or age and start planning our wedding?  Retirement is a financial ability & choice.  It’s a calculation that can be completely divorced from your job.

2. Retirement is the goal.  I’m an athlete.  I dabbled in many sports from basketball to speedskating.  For much of my life I would sign up for triathlons during the summer because if I didn’t have a competition or event to look forward to, I wouldn’t exercise.  This led to procrastination most of the year, an “oh crap” moment a few weeks ahead of the event and then a painful completion of whatever I had signed up for.  Ask my physical therapist, Samantha, she’d tell you I did more harm to myself than good with that routine. 

The truth is, my actual goal was to be healthy and active, not to compete in events.  The healthiest way to accomplish this goal is to prioritize and integrate it into my daily life.  Same is true for retirement, the ability to replace your employment income with income generated by your wealth, is to live a healthy financial life.  If you are one of those who thinks, “I love my work, I will do it forever.”   Wonderful, and you should.  You should also be able to walk away from it financially someday because, if Covid has taught us anything, it’s that things change.

3. It’s out of our control.  I suppose it would be more accurate to call this a half lie than an all-out lie, here’s why.  While a solid retirement plan considers hundreds of variables, the single largest contributing factor to your retirement success is largely within your control.  That number is how much you spend annually.  While some of that number gives you little choice, taxes, Medicare premiums, inflation.  A lot of what you spend monthly or annually is well within your control.  Again, this could be its own rant, but the short version is to focus your energy on the big-ticket household expenses.  Housing and transportation generally make up large percentages of your income needs.  Choose wisely there before questioning the smaller choices like lattes.

4.  You must be invested in the stock market to retire successfully.  It’s easy to take the stance that there’s a right and wrong way to do something when you can quantify it.  If you’ve been shown charts or graphs that demonstrate how the stock market outperforms residential real estate, you know what I mean.  To that I say, so?  The cheapest way to make a T-shirt is to use child labor and pollute.  You’ll get a quantifiably cheaper T-shirt and the company producing it will show a quantifiable higher profit margin.  If that’s how you define success, great, most of us would not. 

The truth about the financial toolbox:  stocks, bonds, mutual funds, real estate (commercial or residential), insurance products, private placements, debt securities…..Is that they all have their advantages and disadvantages, they all behave a little differently under different economic cycles, the tax treatment of each is a little different, they require different amounts of work or scrutiny.  There are many ways to accomplish a successful retirement plan.  What you need to know is what you have access to (the more wealth you have, the greater the options) and what you prefer. 

If you’d like to hear more perspectives like this on money, check out my podcast Money Un-Tabooed.  If you have questions or would like to discuss further, book a complimentary 30 minute appointment here  online calendar