Never Assume In Retirement Planning

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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.

Click the timestamps below to jump ahead in the episode…

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.

A Point Of Wisdom:

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Your Guide:

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