This three-part article series examines the results of a survey, which revealed

insights into many potentially dangerous misconceptions Del Mar residents have

about retirement and retirement planning.

fter the results of a survey by the Met Life and Employee Benefits Research Institute were

released, it would seem that Del Mar residents have some very strange misconceptions

about retirement planning, many of which could prove disastrous for their future! In this

three-part article series, we’ll take a closer look at these results in order to abolish these

dangerous misconceptions and set our thinking straight.

Survey Asks: What Percentage Of Your Retirement Do You Expect to Live

on Every Year?

According to the results of the survey, a significant 43% of Del Mar residents expect to be able to

draw upon 10% of their retirement fund every year.

What this essentially means is that in the absence of any other form of income, your retirement

funds will only last you 10 years. And yet most people live at least 20 years after retirement and

even then you’ve got to factor into account the desire to leave a legacy to your spouse and/or

children.

Del Mar financial advisors generally recommended that retirees subsist off of 4% in their

first year of retirement and then a slightly greater percentage every year after that, which will

accommodate inflation. But all of this simply doesn’t escape the fact that living on your savings

alone is just a bad idea. The average American only puts away $50,000 for retirement, which is

vastly insufficient to live off of without any other form of income.

Thankfully, most Del Mar residents do better, but it is still recommended that you keep some

projects in the pipeline post-retirement.

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Survey Asks: By How Much Do You Expect Your Living Expenses to Drop

Post-retirement?

Perhaps part of the reason Del Mar residents expect to be able to subsist off of relatively smaller

savings is because they also expect their living expenses to drop. In fact, according to the survey,

they expect their spending to drop a staggering 49% post-retirement, which means their income

needs will be just about halved.

This is a very dangerous expectation to have. You may not be commuting to work every day and

you may not have the various work-related expenses you used to have, but what you are doing

now that you never did before is travelling more, eating out more, perhaps playing more golf,

subscribing to more magazines and generally investing more money in your quality of life.

Additionally, your biggest living expenses don’t become less expensive when you retire… the

house costs the same, insurance costs the same, medications cost the same, etc. You will need to

be able to pay the same bills.

The take-home message here for Del Mar residents is that you have at least 10 to 20 strong,

healthy years to enjoy in retirement and you likely won’t spend those sitting on the porch

knitting a scarf or reading the newspaper. You’ll spend them getting out, socializing and doing the

things you’ve always wanted to do. Your retirement fund should be able to maintain the quality

of life you’ve become accustomed to, if not better.

Stay Tuned for Part 2

Stay tuned for the second installment of this three-part article series to learn more about the

potentially disastrous misconceptions Del Mar residents have about retirement.

Living The Life You’ve Always Dreamed Of . . . .