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Retirement Planning Myths

by Michael E. Leonetti

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"Some people spend more time planning a two-week vacation than they do retirement planning."
~ Anonymous

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Michael E. Leonetti , CFP, is the president of Leonetti & Associate, a fee-for-service financial planning firm based in Buffalo Grove, Ill..
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Retirement is a passage from one lifestyle to another. One way to think of the term "retire" is by placing a hyphen between the 'e' and the 't' and creating a new term—re-tire: To put on new treads.

Those who take the voyage seriously and do the right kind of retirement planning usually have a smoother trip and more fun.

Discussions with seasoned retirees indicate that there are many myths and misconceptions about retirement. Often you will hear these myths stated as fact. Here are some of the most common ones.

Retirement Planning Myth: The Female Exclusion

Some people, including women, continue to believe that only men retire. This misconception ignores the career women who have the same retirement adjustment problems that men have. Also, it falsely assumes that women not holding down 9-to-5 jobs cannot retire and therefore do not need retirement planning. This may stem from the old saying: "A man's work is from sun to sun, but a woman's work is never done." Homemakers often have a more difficult voyage than those who retire from a job. Women who have been homemakers all their lives need to insist on being a full partner when their spouses retire.

One reason the myth may continue is that women sometimes lose their spouses early. The transition of widowhood is so traumatic that it hides the equally important second passage that must be made.

Retirement Planning Myth: The Piece of Cake

Retirement should be the dessert that follows the full-course meal of earlier life. Maybe this is why pre-retirees view the transition as a piece of cake. Instead of thinking ahead to retirement, they make comments such as: "My retirement plan consists of putting all of my work problems in my briefcase and presenting them to my boss as a farewell present," or "Retirement is a pot of gold at the end of the rainbow. You don't have to plan for something that beautiful."

Many pre-retirees are so occupied with getting out of their career traps that they seem to care little about what happens when they leave their jobs and do little retirement planning. Despite the fact that they have planned other phases of their lives, they seem to feel retirement will take care of itself. The opposite is often true. For example, many retirees go back to work because they cannot handle leisure time. Learning to live in comfort and with style after retirement does not necessarily come easy

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Retirement Planning Myth: The "Honey, Do" List

The word has been out for years that some men put off retirement planning and retirement because they fear their wives will control their free time and the house. It will be, "Honey, do the dishes," "Honey, do the windows," and "Honey, take the dog to the vet." Normally, these individuals need not worry because most women don't want someone under foot, monitoring their activities and invading their space. One wife expressed it well: "The only time you will ever hear me use that 'Honey, do' expression is when I say, 'Honey, do something on your own, away from the house, so we can both have room to breathe.'" Spouses need the same autonomy after retirement that they did before.

Retirement Planning Myth: The Hobby Job

One individual tells the story of a man so concerned about retirement that he experimented with hobbies in advance. By the time he retired, he had run through his hobby possibilities and had to find something more substantial to occupy his time. The same thing can happen after retirement. Don't misunderstand, hobbies are a great idea. Those who can derive satisfaction from photography, gourmet cooking, stamp collecting, and so on are lucky. But hobbies must continue to be fun and interesting or they quickly become unsatisfying. Few people create a complete new lifestyle around hobbies. A few will be able to convert their favorite hobby into a small business or a lifetime artistic achievement, but most are not this fortunate

Retirement Planning Myth: Retirement = Early Death

We have all known people who are not around long after their retirement parties. The unhappy scenario causes strange reactions—"It's too bad Joe didn't work longer," "The moment people retire they grow old," or "I'd still have Fred if he hadn't retired so early."

Retirement can be painful, but it is not lethal. It is a change not unlike those earlier in life. Most people who die shortly after retirement probably had health problems before they stopped working. Retirement had nothing to do with their demise.

The only connection between retirement and early death may be that some retirees fail to keep active. They relax to the point that their bodies self-destruct. They give up. They fail to stay in charge. There are many reasons for retiring early, and there are just as many for retiring later. But avoiding retirement planning and staying on the treadmill because you fear retirement will cause early death should not be one of them.

Retirement Planning Myth: Prior Success/Easy Passage

It is not difficult to see why this misconception persists. It stands to reason that those people who are successful before retirement should find retirement easier to cope with than those who did not do as well. Success breeds success; failure breeds failure. Translated, this means that corporate presidents should have an easier retirement than custodians; professional ball players should make smoother transitions than the vendors who sold hot dogs in the stadium; and nursing superintendents should adjust better than orderlies.

True?

Absolutely false! In fact, it often works the other way around. Those who earned high psychic rewards from their careers may have trouble finding replacements after retirement. It may be difficult to find a retirement role that provides enough ego satisfaction. All retirees can build a better lifestyle, but it helps if you truly take the time to think about retirement planning. 

Retirement Planning Myth: The Paid-Up Dues

Some conscientious individuals who have worked hard all their lives feel that they are home free when they retire. They say, "I've done my bit for society; now it's society's turn" or "I paid my dues through church work for 30 years, now the church can take care of me."

This type of attitude does not make for a successful retirement plan — these people operate under the premise that you pay your dues during working years and then draw interest. A nice dream, but sadly, life doesn't work that way. In fact, happy retirees often pay more dues, not less. They contribute more to charitable organizations and communities than when they were working. Perhaps the most successful retirees are those who have an opportunity to repay society by sharing their talents

Retirement Planning Myth: The Odd Job

If you ask friends who plan to retire in the next few years about their expectations, some will reply: "There are enough jobs around the house to keep me busy for at least 10 years."

Those well-meaning individuals, without knowing it, are using odd jobs as an excuse. They think about how satisfying it will be to catch up on all the little chores they have been avoiding. It usually takes only a few weeks to discover the truth. Having more time doesn't make a job any more fun to do. In fact, some retirees hate them so much they return to work for enough money to pay the plumber, gardener, and painter. All probably wish they had done more serious retirement planning.

Retirement Planning Myth: 'Sell a Little Real Estate'

Retirees are attracted to real estate like children to a candy store. You hear this expression over and over: "I'm working on my real estate license to supplement my retirement income by working a few hours a week. All I need to do is sell a few homes each year. Best of all it won't interfere with my leisure activities."

Those who know better find it difficult to keep quiet when hearing this dialogue. Professional realtors chuckle because they know they will not receive any serious competition from this quarter. At best, a part-time realtor will make very few sales. Selling real estate is not a part-time career; it is difficult and time consuming and should not be considered an aspect of your retirement plans. The professionals say you have to be in the field seriously or you should get out. Many retirees attempt real estate careers for awhile and then painfully lower their sights or give up. Few invest the time required to become successful.

Retirement Planning Myth: The 'Money Will Go Further'

Inflation should have exploded this myth years ago. Not so. You still hear: "Think of the money I'll save doing repairs myself," "We will buy less meat and improve our health," "My taxes will be lower," and "Senior discounts are everywhere." These thoughts should not be allowed to seep into your retirement planning mindset.

Although there are financial advantages after retirement, certain factors continue to be ignored. What about the problem of having more time to spend less money? What about increased expenses for home, car, and medical insurance? Utility bills? Unfortunately people don't have trial retirements to test how far their money will go. If they did, they would discover that retirement dollars do not stretch any further than pre-retirement ones, and there are usually fewer of them.

Retirement Planning Myth: Stay Busy

Keeping busy is a great idea after retirement, providing you are doing what you want to do. But if you keep busy simply to be busy, you are falling for the myth. Some people think that if they stay busy enough, their retirement problems will go away and they will be happy ever after. Others stay busy to anesthetize themselves against thoughts of aging or living alone.

These individuals seem willing to trade a life of potential contentment for a frenzied existence. Instead of slowing down to design a rewarding retirement plan, they spend time and energy on meaningless tasks. They visit the supermarket daily when once or twice a week would do. They accept social invitations knowing they will be bored. Worst off all, they stretch dull chores around the house. You get the feeling these retirees are avoiding retirement. Are they afraid to face a new, more mature identity? Has life been so disappointing that they dare not hope for anything better? Are they afraid to get off the treadmill and search for late-in-life happiness?

Retirement Planning Myth: The Big Time Misconception

Most retirees grossly underestimate the amount of time they will have on their hands following retirement. We live within a 24-hour time box. Yesterday is gone, tomorrow is pending, today is center stage. To be happy, both before and after retirement, we must deal effectively with each time block—every day.

Actually, time relates to our waking hours. Retirees often do not understand how large a block of time 16 hours is. You can fly to London from San Francisco and still have time for a stage play in 16 hours, or drive across two or three large states. During this time period, it is possible to play 18 holes of golf, take a good swim, have dinner with friends, go dancing, and still read a few chapters before bed.

Yet, if it is not filled with meaningful activities, 16 hours can be forever. Some retirees merely treasure their time while others take this treasure and convert it into excitement. Still others permit time to bore them to death.

What is the difference?

The answer may lie in effective retirement planning. Some retirees keep something planned to maintain their excitement and motivation. Others, with the same opportunity, have no special events to fill the time and stretch uninteresting tasks just to get through each day.

Summary

Both women and men have their own retirement considerations. Knowing the myths and misconceptions about retirement and retirement planning helps an individual avoid foolish, unnecessary mistakes.

One of the key challenges of retirement is knowing what to do with your time. Give careful consideration and planning to your future retirement years and avoid some of the myths that are still so prevalent.

Michael E. Leonetti , CFP, is the president of Leonetti & Associate, a fee-for-service financial planning firm based in Buffalo Grove, Ill. .


Discussion

Bob from NY posted over 4 years ago:

GREAT..


Tim from CA posted over 4 years ago:

I've been retired 3 years and agree that this article makes many good points. The one about the myth of living on less was especially applicable in my case. Our expenses definitely grew as we used our new-found free time to travel and take avantage of entertainment opportunities in our nearby community.


William from OR posted over 4 years ago:

My wife and I have been retired more than 25 years. The first eighteen years were spent traveling the U.S., Mexico, and Canada, in travel trailer and motorhomes. Seven years ago, we moved into a retirement facility, where we are free to be as active as our abilities will allow, or as dependent upon assistance as our gradually decreasing energy and abilities require.
The traveling years were the best years of our lives. But, we disposed of the old homestead before we started off to travel.
We believe that a happy retirement requires doing what you really want to do, and can afford, and disposing of homes, properties, and activities which are inconsistent with your plans. If you don't enjoy doing it, do something else.


Arthur from CA posted over 4 years ago:

It is difficult to understand why so many people who have over sixty years of life experience when they face retirement have so much difficulty reaping the rwards they worked so hard for. My wife had retired from her 26 years teaching elementary school.kids. Three years later, I passed my 65th birthday with 40 years of working for only two employers; 25 years with the federal government and 15 years for private industry. Both of our kids were well started in their own careers. We moved into a condo so we could just turn the key in the lock and go travelling. We travelled to far away places; one or two countries a year for at least a month at each place so we could really learn about the region, the people,the life styles. But we rarely stayed at fancy hotels and only sampled gourmet restaurants as an adventure treat) For lunch we searched the local delies, bakeries,charcuteries, etc., for a few treats to go with some wine of the country and found a quiet place by the river
a shady park or a beach. Not once did we go home not feeling it was a rewarding experience. We continued until my companion ran into some health problems. When she
recovered, it was time to do the easy stuff; travel close to home. We had had a ball, walking on the Great Wall of China,cliimbing over the ancient ruins of Greece,hiking the biblical paths in the Holy Land, the tombs of Egypt. How the years ran by. Now, more wonderful years getting to know our own country better and our neighboring peoples to the south.

My wife, now in her mid-seventies and I a few years beyond, moved to an active-adult community, a golf and country club in our
area in California. I soon declared to my
partner decisively, "This is as close to heaven as I will ever get!" But after 23 years of a modest but rewarding retirement,
Lil left me; at 87 she just ran out of energy. At 93 I can appreciate how lucky we were we had agreed to live on my income and save almost all of hers except what we paid out for the kids' education. We had done due diligence on all major expenditures and on every investment entered (we made mistakes too.) We accumulated zero long-term debt.
"Paygo" as it is now called, worked for us.
I pray the present generations will learn
some of what we and our kids did.


Jay from AZ posted over 3 years ago:

I retired 15 years ago from a busy engineering business life and suffered depression after 6 months. I had to find meaning in my life. I found it when I started focusing on caring for myself and my family. I also developed many new hobbies that are nourishing me spiritually.


Diane & lee from Az posted over 3 years ago:

My wife and I (mid seventys) are living in an active style retirement community for the past 5 yrs. We are busy as ever. I work pt time in summers for the same co I was with for 32ys. We are busyier than ever and love the activities we are in. We have been blessed with good healt and work out and stretch daily if possible. We have been able to travel to one foreign country/ year for 10-15 days. In addition, we love to see some part of the USA every year too. I believe the secret is to keep busy; It's amazing how little time one has to complain about the aches and pains we all encounter!


Bart from AZ posted over 3 years ago:

The article and comments that followed have been thought provoking, inspirational and instructional. particularly Arthur's comments. I have been "semi-retired" for a few years, waiting for the right time to retire. My wife and I have been blessed and have enjoyed benefits of retirement, such as traveling, without retiring. I can't seem to bring myself to fully retire. This article and others have certainly shed light on how others are doing it(retiring).


Allen from AK posted over 3 years ago:

Unlike most of the previous comments, I've yet to retire. It's looming on the horizon in the next two to four years, yet I will be elledgable within 7 months for full benefits from the US Government, if I so choose. I enjoy my job, expecially the friendships I've established over the years and have to say nearly all the points mentioned in this article have come to mind already. I enjoy a few hobbies but don't want them to become my retirement "job". I'm content with my current job but don't want to become ineffective because of neanderthalism. I'm sure the answer as to when and what afterwards will come soon. Thanks all for your comments.


Chris from NJ posted over 3 years ago:

Thanks to all for the postings (especially Arthur). I'm beginning (albeit a bit late) to take a harder look at retirement, as far as when to retire, the financial situation required, and what to retire to. At 53, after 35 years with a large engineering company, 55 is mighty close, and 62 and 65 aren't that far off. The insights posted here have great value to me and I appreciate you folks taking the time.


Tom from AR posted over 3 years ago:

Someone told me that retirement was not biological. I had a friend who had worked for the railroad for 35 years, and after he retired he fell ill for 3 months until he reinvented his schedule and life style. I have another friend who hated his job with the state and could not wait to retire and get out from under a his boss.On the other hand, at 63, I like what I do and am able to provide the income I need on three days work a week. I feel like I'm partially retired but still have a purpose and can contribute to others as well as my income. So I have the best of both worlds for now.


Janice from FL posted over 2 years ago:

I am kind of scared of retiring. I derive a lot of satisfaction from my job. I was unemployed for 6 months and, besides job hunting, looked for fulfilling low-cost activities. I am still doing the volunteer work that I started during that period, but I have not found anything yet that provides the satisfaction I get from my job. A successfully retired friend wrote me that, "retirement is a shift from 'doing' to 'being'."


David from NC posted over 2 years ago:

I am approaching retirement age and have heard many times most of the comments posted here. The challenge I find myself in, is my health enables me to continue working but the challenge of working full-time at a high level position is becoming increasingly difficult. It would be great if work could slow down and accomodate a slower pace but staying in the work force full time doesn't allow one to phase themselves out of a demanding full time job. The forces of competition and survival in this difficult economic environment means you have to stay on top of your job day in and day out to keep your organization successful. Moving from this environment to that of retirement is nothing short of shock therapy. I don't know how you structure a more satisfying transition to retirement,but I'm determined, to put the same level of effort as I do my job, to finding out.


Shahul from GA posted over 2 years ago:

Great comments.Enjoyed reading them.


Paul from WI posted over 2 years ago:

I retired at age 60 11 years ago. It was tough at first financially, but early SS and good money management make retirement a time when I can give back to the community. Giving to others who need help, advice or friendship is a rewarding service that keeps me healthy and fulfilled.

I thank God everyday for giving me the time and energy to live each day for the future. Geting old isn't great, but it sure beats death and giving to others beats depression. Try it, you'll like it and you won't have time to wonder what you will do next! :)


Elizabeth from TX posted over 2 years ago:

My husband is 14 years older than me so I continued working full time when he transitioned from a full-time to a satisfying part-time job with minimal pay. We were able to do this because we made it a priority to become debt-free first. Four years later we built our dream house on the bay and I transitioned to part-time work. After another six years, we tired of high insurance and running from hurricanes. I fully retired and we took proceeds from selling our house and built another one in the country. We now farm and garden and are still debt-free. We don't live extravagantly but buy what we need and discuss major purchases before we buy. So far our diversified retirement savings have held up through some pretty frightening market downturns. With 90's-100's becoming the new life expectancy, we're trying to become more knowledgeable about investing ourselves rather than relying on others to make our money last.


Debora from MA posted over 2 years ago:

I am 47 and lucky enough to be able to stay home even though we don't have kids. I quit my job as an Employee Benefit Specialist to follow my husband to a new city for a job. The transition has been hard because I didn't know anyone in my new city. But it sure beats the inflexibility of non-stop work. Now I plan adventures for us for the weekends so that we truly see our new region. My house is clean for the first time ever. We never waste any food because I have time to plan meals and to shop accordingly. Two spouses both working in corporate America is absolutely exhausting. You are never away from your email and texts. Going on vacation is torture when you return because it all piles up while you are gone. The pace is inhumane! I am working on finding a career where I am not "owned" by my company. Until then I am enjoying my "temporary retirement". Full retirement no longer scares me in the least.


Anne from TX posted over 2 years ago:

I retired from 23 years in real estate to take
care of my lovely mother for four years until she turned 100 and passed on. She wanted to go all the time so we had a wonderful 4 years
together and a huge 100 year birthday party.
She didn't spend a day in bed until her last.
Then I spent 3-4 weeks a year travelling to
China, Australia/New Zealand, Germany, Great
Britain, Tanzania/Kenya on high the whole time. I also travelled in the U.S. I retired at almost 70 after loving my job and
moved to Texas to be near my daughter at 79.
Now I am in charge of my church outreach program and volunteer in other capacities, too. At 84 I began learning about investing
and am having a wonderful time. I can't
imagine how anyone could ever be bored. There
are so many books I would like to read. Just to help out, I take care of a 2year old every
Friday and am involved with the other young
people in this church family. I didn't see
much of my grandchildren's growing up as they
were out of town so I am especially enjoying
this good little boy. I have been a widow since my mid-40's. I should add that I enjoy
tremendously the three people I play bridge with once a week too. My Dad held me under his thumb very closely all my growing-up life.
Though I had wonderful friends, I never felt
I had a happy childhood. Once I left for
college and was out from under his control, I
haven't stopped enjoying life even though there have been difficult times just as most
people have.


Frank from AR posted over 2 years ago:

My wife worked for me so 3 years ago when I retired at 69, she was forced to also. Since then we have gone slow, kind of seeing how we are doing. She does as she has bridge games and children and managing our home, while I do my hobbies, photography, genealogy, tennis, fishing and sailing (which I would love to do the US coast). She has become afraid of the water. I have kept us invested as I think we need to plan on another 20-35 years. I am now 72 and our problems seem to be more different desires than financial, provided we don't have another major downturn..


Robert from MO posted about 1 year ago:

Being 71 and retired for 5 years I have found retirement as a transition from working at a job to working for yourself through projects you enjoy and volunteer activities helping others. My wife retired at the same time as I. She enjoys reading, writing, meeting with girl friends and preserving the memories of our lives. What ever you take up in retirement it must give meaning to your life. While the thought of never having a schedule to follow in retirement is appealing, I find without establishing some schedule I will not get things I feel are important done, such as regular exercise, long walks and routine visits to a gym.
One of the nicest things about not being tied down to a job is the ability to pick up and go when your needed by a relative or a vacation trip you want to take.

My wife and I enjoy our retirement and we have found satisfaction in the way we spend our time.


Robert from MO posted about 1 year ago:

Being 71 and retired for 5 years I have found retirement as a transition from working at a job to working for yourself through projects you enjoy and volunteer activities helping others. My wife retired at the same time as I. She enjoys reading, writing, meeting with girl friends and preserving the memories of our lives. What ever you take up in retirement it must give meaning to your life. While the thought of never having a schedule to follow in retirement is appealing, I find without establishing some schedule I will not get things I feel are important done, such as regular exercise, long walks and routine visits to a gym.
One of the nicest things about not being tied down to a job is the ability to pick up and go when your needed by a relative or a vacation trip you want to take.

My wife and I enjoy our retirement and we have found satisfaction in the way we spend our time.


Patrick from KY posted 10 months ago:

I am 62 and not retired yet. The thought has me as indecisive as the last downturn in the market. My advisors tell me that i can retire and be OK financially.
I do have hobbies but not consuming ones. Travel seems like the avenue many take initially in retirement but my wife is not inclined to take trips longer than one week or more than twice a year. What tools do others use to find the mix for a happy retirement? I can continue to work but my job does not allow slowing down and aspects of the work are trying at my age. (night work)
Making this jump is foolish to me without a plan. I would like to find the tools to create the plan. Any suggestions.


Ali from New Jersey posted 4 months ago:

I am new to AAII and I hope to learn a lot about investing and saving for retirement.
I am 62 and want to retire in about a year. I am a consultant in pharmaceuticals. In New Jersey there are several large pharmas so I usually find work. My husband is still working but plans to retire next year. We have no children. We've been pretty careful about saving in our 401Ks and he has a pension too. I think we will be okay financially if healthcare costs don't drain us. I fear that congress may try to limit Medicare funding causing my costs to rise. We both are concerned but don't let it affect our daily lives. We also are thinking about moving out of this state because property taxes are ridiculous!
That's about all that's on my mind today, thanks.


Jim from New Jersey posted 2 months ago:

I decided to take an early out from a major aerospace company last fall. My long term plan was to retire early, find part time work, spend more time travelling and with family, and more time with hobbies of music, model railroading and gardening, and possibly pursue adjunct teaching at the college level. Having a vision and a plan has been essential!

I was purely retired for the first 4 months and started to get just a little bit bored. I resolved to find the right part time job and/or consult. An alternate or second plan was to teach part time at a major university either in engineering or management. So the one thing that really helped me achieve that balance was LinkedIn. After building up a decent set of contacts, who certified my abilities, the opportunities started to flow directly to me. A job opportunity that exactly fit my background - part time. And having made several contacts in the academic world, I am now seeing the exact opportunity I was looking for as an adjunct professor. It's been a wonderful balance - enough free time to pursue my 'non paying' interests, and now the perfect work and teaching opportunities. So having the dream, and then a plan has worked out for me. I can see living this way for a long time, much lower stress, much more learning, and income for part time work that matches my full time 60/hr week job. Can life be any better?


Steven Stark from ID posted about 1 month ago:

I retired two years ago at 56. I ran several "Monte Carlo" evaluations. I set a budget for us and I keep track of it on two formats; bank software and Quicken. I met with a fee only financial planner to look over my plans before retiring.
Learning to invest was time consuming at first until I gained confidence on my strategy. I WAS confident of my strategy until the market went down 10%. So, I suggest if you plan on doing your own investing, you start running a portfolio before you retire.
My wife and I are very busy having fun with our grandchildren and helping our adult children who all live in our area. We have other interests also that keep us busy.


Dave D. from Texas posted about 1 month ago:

My wife and I have both been retired for 19 years. We sometimes find that there aren't enough hours in the day, but our activities are not "meaningless." We really enjoy most everything that we do. We positively expect to enjoy our activities, rather than negatively expect to be bored. The one phrase that really irks us from our grownup children and others is, "With 'all of your free time every day.' (when we really don't because we're busy doing what WE want to do.) You need to be doing such and such." This points out one big problem in retirement that you do not mention. We must learn to politely ignore people when they seek to coax us into activities that THEY want us to do if we truly don't want to do those particular activities.


Richard from TN posted 22 days ago:

After graduation from THE Ohio State Univ 1961 we lived in 7states and 6 cities Both employed in the computer industries. Stopped working in 1998 and moved to great state of TN.

My job in retirement is to make money in the stock market. My wife's job in retirement is to spend that money--she makes quota every year.

This life is better than doing that dirty 4 letter word-----W--O---R---K.


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