Today’s Hack:
Have you heard any of these financial rules of thumb? Are they worth following or are they outlandish and outdated? Let’s discuss whether these rules are legit or full of bull.
Click the timestamps below to jump ahead in the episode…
Video Version:
Other Retirement Facts:
We all hear various financial rules from time to time, but are they legit? Or are they full of it? Which of these are good rules of thumb and which are better to ignore? On today’s podcast we discuss seven financial rules to see what’s what and help you better plan for retirement.
Before we can determine if these rules are worth following or full of bull, we need to discuss what each of these rules mean. What does the 10 percent, 4 percent, and 80 percent rule apply to when it comes to your finances?
Are you looking at mathematical formulas within your plan? Is the rule of 72 something you’ve reviewed? When making a plan and considering inflation, are you using the rule of 2.67 as your guide or would that be unwise? As you get older and closer to retirement, are you basing your plan off of the rule of 100? Or is that an outdated rule?
Ultimately, you need to know what you’re comfortable with. Rules of thumb or guidelines only go so far. What kind of risk can you handle and what are your goals? Sitting down with an advisor to review not only these general rules, but also a plan that is unique to you will be the most effective way to properly prepare for retirement.
Listen to the entire podcast or click on the timestamps below to skip ahead to a particular rule.
0:32 – Are these rules legit or full of it?
0:45 – Is the 10 percent rule legit?
1:37 – Is the 4 percent rule based on reality?
3:09 – What is the 25x rule?
4:50 – Do you only need 80 percent of your income in retirement?
5:43 – What’s the math behind the rule of 72?
6:48 – What does the rule of 2.67 mean?
9:06 – How does the rule of 100 relate to your age?
Thanks for listening! We’ll be back with another episode next week.
A Quotable Moment:
“The rule of 100 is getting to the asset allocation at a really high level between stocks and bonds, how much you should have invested. Basically taking 100 minus whatever your age is should be about the amount you have invested in stocks.“
-Phil Putney
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Additional Resources:
- Phone: 248.888.7530
- Email: pputney@afswealthmgt.com
- Schedule A Visit With Phil
