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Seven Myths About Retirement Investing That People Need To Ignore

Seven Myths About Retirement Investing That People Need To Ignore

Time To Tune-Up Your 401(k)

There’s a lot of bad advice out there about retirement investing. Some may have started as misinterpretations of research, while others may simply stem from inexperience in a complex field. Regardless, retirement planning is crucial for future happiness: The sooner you’ve established a plan for what you’re going to do, the better off you’ll be.

While nothing replaces talking with an expert financial planner, there are a few common myths you can watch out for. Below, members from the Forbes Finance Council share the myths they urge clients to ignore.

Members of Forbes Finance Council discuss myths about saving for retirement.
Members of Forbes Finance Council discuss myths about saving for retirement.

All photos courtesy of Forbes Councils members.

Members of Forbes Finance Council discuss myths about saving for retirement.

1. Use The ‘Buy, Hold And Forget’ Strategy

The buy, hold and forget strategy can work in raging bull markets where everything is going up together, but what about the risk you’re taking? Managing downturns is more important for most individuals, and can only be accomplished through active management. Markets change over time, and your investment portfolio needs to adjust with it in order to properly manage risk and provide adequate returns. – Seth Allen, Pinkowski-Allen Financial Group

2. Bonds Rise When Stocks Decline

The asset allocations we all use make a bold presumption that when stocks decline, bonds rise, but that really hasn’t been true since the early ’80s (when those studies were published). In a rising interest environment, bond prices decline, period. Having a one-size-fits-all strategy may not fit you as well in retirement. – Paul Ewing, Prosperity Advisory Group

3. You’ll Need Less Money In Retirement

One prevailing myth is the idea that you’ll need 65-90% of your pre-retirement income to maintain your lifestyle. While this might be true for some, it might leave you severely short-handed. For instance, if you travel during retirement, your income needs can be drastically higher than they were during your working years. Don’t apply blanket statements to something this unique and important. – Elle Kaplan, LexION Capital

How To Save For Sabbaticals As Well As Retirement

There’s a lot of bad advice out there about retirement investing. Some may have started as misinterpretations of research, while others may simply stem from inexperience in a complex field. Regardless, retirement planning is crucial for future happiness: The sooner you’ve established a plan for what you’re going to do, the better…

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