If you read enough retirement literature, it's easy to develop a general idea of what ultimately matters most in achieving a comfortable retirement. But it’s just as easy to develop misconceptions about planning for retirement. Make sure you aren't blindly following these common myths about retirement:
A comfortable retirement is all about reaching a target net worth number. It can be useful to have a retirement savings goal. But many people seem to pick a net worth number out of thin air and then spend decades trying to reach it. Before you do the same, make sure you are able to translate that final number into income needs so you can determine if you will have enough to meet at least essential expenses.
Saving more is always the ideal choice. Finances are a big part of being able to enjoy the golden years, but many people forget that a good life is what they should be after. Saving money is extremely important, but so is everything else. Do you actively make an effort to keep your family close physically and emotionally? Are you going to spend time every day to keep yourself in shape physically and mentally? Not everything is going to cost money to maintain, but don't skimp on every expense during the accumulation phrase for the sake of more savings. Those who are truly able to enjoy aging aren't the ones with the highest balance in their bank account, but those who have a balanced life.
There's a perfect withdrawal strategy. Sustainable withdrawals, where you can pick a monthly number to withdraw at the start of retirement and stick with it through thick or thin, don't actually exist. You will continually need to adjust, which will mean you have to keep an eye on your portfolio well into the retirement years. These adjustments can be made well in advance of a disastrous scenario happening and allow you to prevent running out of money in retirement.
You can map out retirement with good certainty. You won't be able to. No matter how much time and effort you spend planning, realize that your retirement may not be exactly as you envision it. Those who are lucky will spend three, four, and perhaps even five decades in retirement. Just as the necessities of today were unthinkable 50 years ago, you can bet that innovation will push your lifestyle to unimaginable heights throughout retirement. Do your best with your retirement plans, but build in a few contingencies just in case you need a plan B.
The last day of work is the finish line. After spending decades thinking, planning, and saving for retirement, it's easy to think that you can let it all go as soon as you hand in your resignation letter. But the reality is that the end of your working years just marks the beginning of another journey. That's actually good news because now you get to enjoy the fruits of your labor.
David Ning runs MoneyNing, a personal finance site that shares money moves you can make to significantly increase your chances of having a comfortable retirement. He likes to share simple changes that anyone can make, such as picking the best online savings account and figuring out whether a 0 percent balance transfer credit card makes sense.