Retirement is a time to relax and enjoy the fruits of your labor, but it can also be a time of stress and financial insecurity if you're not careful. Four habits that can ruin your retirement are: becoming too focused on your portfolio value, becoming too focused on short-term fluctuations, underestimating your spending, and underestimating your longevity. In this video, we will discuss these habits and how to avoid them.

First, becoming too focused on your portfolio value can lead to stress and impulsive decisions. Instead, focus on your long-term goals and have a diversified portfolio to weather market fluctuations. Second, becoming too focused on short-term fluctuations can lead to impulsive decisions. Instead, focus on your long-term goals and stick with a long-term investment strategy.

Third, underestimating your spending can lead to financial insecurity in retirement. Make sure to budget for unexpected expenses and plan for healthcare costs. Lastly, underestimating your longevity can lead to not having enough savings for a retirement that could last 30 years or more. Plan for healthcare costs and consider the impact of inflation on your savings.

To secure a comfortable retirement, it's important to be aware of these habits and take steps to avoid them. Focus on long-term goals, avoid impulsive decisions, have a realistic understanding of expenses and plan for a long retirement. Start planning for your retirement today to ensure you have the retirement you deserve.

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Read The Transcript

Are you hurting your retirement potential without even knowing it? Creating a successful retirement can often be broken down to little habits that people create to help themselves achieve retirement success. Whether that is becoming a more disciplined saver, or a better investor or even creating habits around how they plan their retirement. But for as many good habits that people create, there are also habits that I have seen over the my career of helping people retire that not only get in the way of creating a successful retirement, but actually hurt people’s chances of a successful retirement all together. In this video I am going to share the 4 habits that keep ruining retirements

Hey everyone, I’m Johnathan Rankin, the Founder and CEO of Theorem Wealth Management, a firm dedicated to retirement planning.

Achieving a successful retirement is hard and it is important to create smart habits early in your career such. Whether that is how much you save or how often you save or even how you go about planning for your eventual retirement. All of those little actions compound over time and help you stay on track to a successful retirement.

Unfortunately there is not a magic bullet when it comes to creating retirement success. I like to equate it to getting in shape. Sure people like to think that there are pills and supplements or magic diets that can help you get in shape. At one point, there was even a company selling a gadet that told you that you could get abs by just sitting on the couch while it worked out for you. For anyone who has ever tried to lose weight or get into shape, there is always a moment where they realize, its just going to come down to hard work and discipline. That is the same thing with retirement success. There is this thought out there that people who have achieved a level of financial success did so by finding an easier path than creating good smart habits. In fact, there was a study done by Dave Ramsey’s company called the national study of millionaires and it showed that 74% of millennials believe millionaires inherited their money. In reality only 21% received any inheritance, with only 16% inheriting over 100k and only 3% inheriting over 1mm. In fact the median household income of an average American millionaire family is $131k per year. 78% of millionaires started out poor or middle class and it was hard work, discipline and good habits that got them where they were.

Part of creating good habits is also avoiding toxic habits that can set you back and that brings me to the 4 habits that keep ruining retirements.

1. Becoming too focused on your portfolio value

Many people become obsessed with checking their portfolio value every day, and as a result, they lose sight of the long-term goal of saving for retirement. This can lead to feelings of anxiety and stress, and can also lead to impulsive decisions. I have talked to so many people who have this target dollar amout they are trying to hit. And usually, it is some arbitrary number that has no context in their overall retirement picture.

To avoid this habit, it's important to remember that your portfolio value is just one aspect of your overall retirement plan. Instead of focusing on the value of your portfolio, focus on the steps you need to take to achieve your retirement goals. This includes setting a budget, contributing to your retirement accounts, and diversifying your investments.

2. Becoming too focused on short term fluctuations

Many people make the mistake of thinking that they can predict the market and make quick profits. However, the stock market is unpredictable and trying to time the market is a losing strategy. This can lead to impulsive decisions, such as buying and selling stocks based on short-term market fluctuations. Studies have shown that the odds of a positive return in the market over the course of 10 days is 62%, 67% when pushing that out to 3 months and 75% when holding for a year. That means that there is 38% chance that you are negative after 10 days and even a 25% chance you are negative after a year. But, the longer you hold, the higher the probablilty gets. In fact going back to 1928, there was a 100% chance that you had a positive return over a 20 and 30 year period. I have talked to so many investors who have their systems and think that they can see trends in the market that nobody else has thought about. Or that they know how to “play the market” better than others. This may be just anecdotal evidence that I have witnessed over the course of my career working with retirement investors, but almost every time I have come across someone who tells me all about their system about how they can beat the market, they have, on average, had smaller portfolios than their peers in similar positions, with similar incomes.

To avoid this habit, it's important to remember that the stock market is unpredictable, and that short-term fluctuations do not necessarily reflect the long-term performance of your investments. Instead of trying to time the market, focus on building a diversified portfolio of investments that align with your risk tolerance and retirement goals. Additionally, it's important to remember that investing for the long-term is the key to achieving your retirement goals.

3. Underestimate their spending

Many people make the mistake of thinking that their expenses will decrease in retirement, when in fact, they may actually increase.

To avoid this habit, it's important to have a clear idea of your retirement spending needs. This includes estimating your expenses for housing, healthcare, and other necessities. Additionally, it's important to remember that retirement is a time when you may want to travel or pursue hobbies, which can also add to your expenses. One way to estimate your retirement spending needs is to create a budget and track your expenses for a few months to get a better idea of how much you're spending now.

Another important factor to consider is inflation. The cost of goods and services will likely increase over time, so it's important to factor in inflation when estimating your retirement spending needs. This means that even if you have enough money to cover your expenses today, you may not have enough in the future due to inflation. There are going to be times in your retirement where you have unexpected expenses that come up, which is why it is very important to have flexibility in your retirement lifestyle. There may be years where you may have to reduce your income in certain years to protect the longevity of your retirement success.

That leads me to the 4th and final bad habit that can ruin your retirement, before I jump into that, if have found this video useful, can you do me a favor and hit that subscribe button? We appreciate your support.

4. Underestimate their longevity

Many people make the mistake of thinking that they will not live as long as they actually do, which can lead to running out of money in retirement. I have heard it more times than I can remember from clients when we are planning out their retirement and we are looking into their 90s and they look at me and say, I don’t plan on living that long. Now if you know something is going on with your health, that is one thing, but if it is just the thought that you can’t see yourself living that long and it’s based on nothing but disbelief, that’s where you might want to have an open mind about the advancements of medicine these days. The last thing you want to do is be 85 years old trying to put together a resume.

To avoid this habit, it's important to be aware of the average life expectancy and plan accordingly. This means saving more for retirement and investing in healthcare coverage. Additionally, it's important to make sure that your retirement plan is flexible enough to adapt to changes in your life.

No matter what, retirement comes down to hard work and discipline. While avoiding these 4 habits can help avoid an issue that could derail your retirement. Remember to focus on long-term goals instead of short-term market fluctuations, have a clear idea of your retirement spending needs, and be aware of the average life expectancy and plan accordingly.

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