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The Biggest Mistake In Most Advice About Retirement Income |
By:
Kalinda Rose Stevenson, PhD |
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The Biggest Mistake In Most Advice About Retirement Income
Kalinda Rose Stevenson, PhD
Do you need a certain amount of retirement income to retire? After reading many articles addressed to consumers about the need to save money for retirement, I have concluded that much of this advice is based on restricting assumptions about money. As a result, much financial retirement advice is bad retirement advice.
Most personal finance retirement planning articles refer to the same list of reasons why you should be afraid that you don't have enough money to retire. What are some of these reasons? Most people have not saved enough money. Prices will go up and up. You will probably need more for medical expenses as you age. And worst of all (!), you might live 20-30 years after retirement at age 65 and will probably outlive your money.
Typical retirement advice articles explain all the ways you can figure out how much money you will need as retirement income, based on how you can expect your expenses to increase or decrease.
One typical assumption of most retirement planning articles is that you will pay off your mortgage. Another typical assumption is that your retirement income will be limited to retirement funds, pensions, and Social Security.
These articles often help you calculate how much of your nest egg you can safely withdraw each year to avoid running out of money.
The unexamined assumptions of such articles create fear in the minds of people. They do not teach anyone the single most important skill required to live those 20-30 years beyond retirement age in abundance: how to make money.
The assumption that produces money fear is that your retirement income will be fixed. After you retire from your job, you will not earn any more money.
In other words, you must face 20-30 years of money uncertainty. Your future depends on how much money you set aside during your earning years. Can you imagine a greater money limitation than the idea you have no capacity to increase the amount of money available to you?
If you believe the unexamined assumptions behind typical personal finance retirement planning advice, you must plan to live 20-30 years without making any new money. Whatever money you earned in your working life is the sole basis for what you will have in your future.
Another unstated assumption behind this type of retirement advice is that the decisions of other people will determine how much retirement income you will have available to you.
Your retirement income depends on what other people decide about your pension, your Social Security payments, and interest on various "safe investments," such as savings accounts and certificates of deposit.
These articles create fear because they teach that your future depends upon your present. The underlying assumption is that you will have no other sources of additional income in the future. Your security depends on how much money you can earn and set aside right now.
What is the overall message of such articles? You are powerless to increase your retirement income after you retire from your job.
Kalinda Rose Stevenson, Ph.D. Discover the difference between earning money and making money in a http://www.nomoneylimits.com/realestateinvestingbook) real estate investing book, "No Money Limits." Go to http://www.NoMoneyLimits.com/ http://www.NoMoneyLimits.com for your Free "52 Heart of Money Insights."
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Article Source: http://www.statssheet.com/articles/article69416.html |
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