13 min
Ep 32: Should You Follow These Popular Retirement Rules of Thumb? Retirement Coach's Corner
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- Investing
We’ve all heard a few different rules of thumb when it comes to retirement planning. Are they worth following? Alan and Troy weigh in on what advice to take to heart and which of these rules of thumb don’t pan out.
Let’s start with the rule of 100. This takes your age and your risk tolerance into account. Subtract your age from 100 and theoretically, that’s how much risk you should have in the market. Seek out a fiduciary to see if this is something you should follow. You need to find somebody who can help you navigate the many things in retirement beyond simply your investment allocation.
The 75 percent rule is assuming that in retirement you’ll need about 75 percent of the income you have when you’re working. The reality is, most people end up spending more the first few years of retirement because you have the freedom to travel and do what you’ve been putting off.
Finally, can we rely on the rule of five? This says on average, we’ll experience a bear market every five years. While it has happened in the past, it’s not always something that occurs every five years. Going into retirement you have to be a little more aware of where the market is, but if you use the proper planning it really shouldn’t matter.
Listen to the entire episode or skip ahead using the timestamps below to hear more.
0:45 - What rules of thumb have you heard about retirement?
1:16 - What’s the rule of 100?
5:50 - Is the 75 percent rule accurate?
8:02 - What does the rule of five say?
Get additional financial resources here: https://mercurioadvisors.com/podcasts/
We’ve all heard a few different rules of thumb when it comes to retirement planning. Are they worth following? Alan and Troy weigh in on what advice to take to heart and which of these rules of thumb don’t pan out.
Let’s start with the rule of 100. This takes your age and your risk tolerance into account. Subtract your age from 100 and theoretically, that’s how much risk you should have in the market. Seek out a fiduciary to see if this is something you should follow. You need to find somebody who can help you navigate the many things in retirement beyond simply your investment allocation.
The 75 percent rule is assuming that in retirement you’ll need about 75 percent of the income you have when you’re working. The reality is, most people end up spending more the first few years of retirement because you have the freedom to travel and do what you’ve been putting off.
Finally, can we rely on the rule of five? This says on average, we’ll experience a bear market every five years. While it has happened in the past, it’s not always something that occurs every five years. Going into retirement you have to be a little more aware of where the market is, but if you use the proper planning it really shouldn’t matter.
Listen to the entire episode or skip ahead using the timestamps below to hear more.
0:45 - What rules of thumb have you heard about retirement?
1:16 - What’s the rule of 100?
5:50 - Is the 75 percent rule accurate?
8:02 - What does the rule of five say?
Get additional financial resources here: https://mercurioadvisors.com/podcasts/
13 min