9 Pieces of Dumb Retirement Advice That Most People Believe

Planning for retirement today is a lot different than it was thirty years ago. Pensions are a thing of the past, the longevity of social security is iffy, and the stock market seems to be one bubble after the next.

Unfortunately, the clichés of retirement advice haven't changed much, and many are badly outdated. According to money experts, here is some of the worst advice most people still believe, but you should definitely avoid.

Rules of thumb are attractive because they make the complex simple to understand. Believing that a certain dollar amount is the main factor that determines your retirement success may be misleading.

$1 Million in the Bank Equals Retirement Success

Rules of thumb like the 4% rule are meaningless unless they are related to an individual strategy which takes into account your personal cash flow needs and some type of investment allocation model which is designed with your unique goals in mind.

You must avoid falling for expensive insurance and annuity sales tactics that are too good to be true. Variable annuity sales increase when the stock market has declined.

Annuities and Whole Life Insurance Will Protect Your Income

You Can't Afford a House Because of Your Starbucks Habit

The dumbest piece of advice nowadays is that your morning Starbucks and Netflix subscription is what's stopping you from buying a house. When house price inflation is in double figures, on the average salary, the best you can do is to save enough to stand still.

Stopping these costs won't move the needle in saving for a house but will make a difference in saving for retirement. With regret, I started investing way too late in my career, and I'm paying for it now, so start as early as you can, and you'll have more choices later in life.

Always Withdraw From Taxable Accounts First

One primary mistake is spending from the wrong accounts! Conventional wisdom has led consumers to believe the order of withdrawals should be: taxable accounts first, tax deferred next (401ks, IRAs) and tax free last (Roth 401ks or Roth IRAs).

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