Common Retirement Assumptions

We all make many retirement assumptions, some of which we are not aware of.  We feel entitled to an enjoyable retirement after working most of our lives either inside or outside the home. Social Security and Medicare are entitlement programs that we all assume will ensure a big part of our retirement income. Some of us assume that we will live well without a partner because of our network of good friends. If we have a partner, we assume they will be there for us. We further assume that our health will continue to be stable. We certainly don’t expect to become disabled or significantly impaired in any way.

The hard truth is that many assumptions in life don’t work out. When you were young, did you think you would be where you are today? Of all the mis-assumptions that are made, I find that the most mis-calculated area is in money matters. Many women I speak with assume that the financial part of retirement will be taken care of. Some mention that their parents will pass on their money, that Social Security will provide for them, or their partner or advisor will help.  It’s the number of static assumptions without backup plans that worries me the most.

Why don’t we prepare better? Well, assumptions set expectations for the future and reduce our worry. Since we don’t want to worry or feel anxiety about the future, assumptions offer predictability and provide us with perceived security. When we feel too secure, we become complaisant about building our savings and investments.  So, many of us find it easier to live with assumptions. However, assumptions afford us less understanding, less control, hinder our problem solving skills and can even ruin your retirement. We trick ourselves into a false sense of security.

A common example is a wife who gives financial control to the husband while assuming he won’t make investment mistakes.  I can tell you from personal experience as a stockbroker and real estate investor that everyone makes mistakes when investing. How people deal with these mistakes is determined by the amount of experience they have with market losses. But, even in this day and age, many women still allow their advisor or partner to handle personal investments and often turn a blind eye. That can be a big mistake since men typically take more risks when investing. (See:

For many women, learning investing is like going to the dentist. But, I believe that is simply an attitude that can be changed at any time. If you’re not worried because your partner is financially knowledgable, what if you outlive him? Being a single woman only increases the need for financial acumen as you must depend on yourself. So, just as we become resigned to go to the dentist, we also must become resigned and determined to manage money. After all, it is your future.

It helps to think like a single women who must be self-sustaining and more creative than her counterpart. Most single women do not assume someone will take care of them, they know they have to do it.  I know that many people find money management too complicated, laborious or even boring. To help make investing more exciting, consider joining an investment club, engaging in online discussions, read books, and take classes. If you are single or a couple, taking investment classes is a solid foundation to build upon. I also like investment clubs because you get actual experience investing and you get to hear all the strategies. You can even start your own investment club if one is not in your area. Think of it as similar to a book club. Even if you are seeing an advisor that you trust, you still want to understand the strategy and the risks–you never want to be in the dark.          L.J.

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