Common Misunderstandings of Retirement Planning

by Gary Brooks, CFP®, CSRIC™
April 10, 2024
Common Misunderstandings of Retirement Planning

This article was originally published in full on Tacoma’s The News Tribune on February 5, 2024. Gary Brooks has been a contributing author for the paper since 2008 and is also a Partner and Senior Wealth Advisor at Mission Wealth in Gig Harbor, WA.

Most people spend most of their adult years preparing for retirement. This usually entails deciding at what age, or amount of savings, it is feasible to stop working. It’s not just a two-factor decision, however. There are several topics to understand, some of which are greatly miscalculated.

Let’s review some misunderstandings that could greatly improve your retirement planning.

Common Rules Are All You Need for Your Retirement Plan

 You will need 80 percent of your pre-retirement income in retirement. You can spend an inflation-adjusted 4 percent of your investment portfolio value annually with a high probability of not running out. These, and other general guidelines, are quickly challenged by personalized financial plans rather than one-size-fits-all templates for how your retirement income and spending will go. Nobody spends in a consistent stream year after year. Your cost of living will bounce around. There will be years when you need to replace a vehicle, or a roof, have extra out-of-pocket medical expenses, or take an extra trip. Beyond your basic budget, you will need flexibility to deal with the variability of life.

Your Investments Need to Outperform

For more than 15 years, I’ve built comprehensive financial plans. I have not yet and do not expect to in the future, come across a scenario where a person/couple needed investment returns that beat the market averages for their plan to work. Simply achieving market-based returns, compounding growth, and generating income, is likely to get the job done if your expenses are within reason. You don’t have to find the next individual stock or thematic fund that’s a great growth prospect.

In fact, market history suggests that finding the “winners” is exceptionally elusive and likely to cause you to have worse returns than if you had positioned your investments to accept the market return and spent your investigative time in some other worthwhile pursuit. 

'Market history suggests that finding the 'winners' is exceptionally elusive and likely to cause you to have worse returns than if you had positioned your investments to accept the market return.' says Senior Wealth Advisor, Gary Brooks.Click To Tweet

A Wide-Open Calendar Will Be a Relief

You will need to redefine yourself as a retiree. Most people who have applied themselves to a career for decades have a significant portion of their identity defined by their work life. Take that away and a gap needs to be filled with a new interpretation of who you are, what you are interested in, how you will fill your calendar, and where your purpose will come from. Knowing this, retirement planning is about far more than achieving a number that you associate with financial security, it’s about achieving comfort with your new self when much of the context of your life has gone through a large transition.

You Should Explore All the Things That You Could Do

 Re-defining yourself could go a lot of different ways, and likely will evolve. However, rather than sampling all the possible things you could do with your time, at least early in retirement, it may be wise to follow Paul Shoemaker’s suggestion to focus on what you “can’t not do,” the name of his book.

To find happiness, define what must be part of your life, those activities that you cannot live without. These activities can be wide-ranging and don’t have to be full-time commitments. Everyone is motivated or inspired by something different. For some, their “can’t not do” will be related to a volunteer activity, mentoring, physical fitness, or a personal hobby. What’s yours?

You Should Know Everything

As Stephen Dubner and Steven Levitt wrote in their Freakonomics series book “Think Like a Freak”, human nature makes it hard to get comfortable with saying “I don’t know.” We’re more likely to make up something relatively plausible than admit a lack of knowledge. In many cases – including some key assumptions about a decades-long retirement – “I don’t know” is the only correct answer. Knowing what you don’t know may prevent mistakes.

In the business of money and markets, nobody can assuredly tell you when interest raise will decline, by how much, over what time frame, and what will be the impact on stocks, bonds, or loans. It’s just the same for inflation, how long the stock bull market will rally, whether international stock returns will catch up to the U.S., or how to preempt the next market shift with a change in your portfolio.

Preparing for the “What-Ifs” With Mission Wealth

It is because “I don’t know” is sometimes the only real answer that your retirement plan should have a margin of safety, and extra dollars available in case many of life’s misunderstandings or outcomes are not in your favor. In your retirement plan, it’s helpful to know that even if expenses are higher than expected, life is longer than expected, or investment returns poorer than expected, there will still be enough money left to cover the “I don’t know” aspect of managing money for the future.

Mission Wealth’s retirement and financial specialists can help you run your retirement numbers. We will provide analysis to assist you in better understanding your financial future and can help get you on track to the retirement you’ve worked so hard for.

Contact us today for a free discovery consultation and receive your next steps to secure your best financial future.


This may be your first time retiring, but it's not ours. You will face many decisions when deciding the best time to retire. Let us guide you through your options and create a plan that works now, and later.
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Retirement Planning with Mission Wealth

Mission Wealth Can Help You Retire with Confidence

This may be your first time retiring, but it's not ours. Careful coordination is required to ensure your retirement income strategy is tax-efficient and sustainable. You will face many decisions when retiring. Let us guide you through your options and create a plan.

Mission Wealth’s vision is to provide caring advice that empowers families to achieve their life dreams. Our founders were pioneers in the industry when they embraced the client-first principles of objective advice, comprehensive financial planning, coordination with other professional advisors, and proactive service. We are fiduciaries, and our holistic planning process provides clarity and confidence. For more information on Mission Wealth, please visit

To meet with a Mission Wealth financial advisor, contact us today at (805) 882-2360.


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