Retirement Rules To Ignore: Outdated Advice You Don’t Have to Follow

We’ve all heard the familiar advice passed down through the generations: "Save 10% of your income," "Pay off your mortgage before you retire," or "Live frugally and you’ll build wealth." 

But in today’s evolving financial landscape, many of these old-school rules no longer apply—especially for high-net-worth individuals.

As a financial advisor with over 25 years of experience, I’ve had the privilege of guiding countless individuals and families through the complexities of wealth management and retirement planning. And while everyone's financial situation is certainly different, there are some retirement rules that simply no longer hold true in today’s world.

It’s time to rethink some of the outdated advice that may be limiting your potential and holding you back from maximizing your retirement.

Here are some retirement rules that don’t necessarily hold up in today’s financial climate:

1. "Save 10% of Your Income for Retirement"

• Why You May Be Able To Ignore It: While saving is undoubtedly important, the 10% rule is a one-size-fits-all approach that doesn’t consider the complexities of today’s financial world. 
• What to Do Instead: Work with your financial advisor to develop a personalized savings and investment plan based on your unique financial goals, income, and timeline.

For high-net-worth individuals, saving 10% might be far too little, while for others, it may not be enough. The key to retirement savings isn't a fixed percentage—it's about strategic investing and tax optimization. This means leveraging retirement accounts, real estate, and other investments that allow you to grow your wealth faster and more efficiently.

2. "You Need to Pay Off Your Mortgage Before You Retire"

• Why You May Be Able To Ignore It: While the idea of entering retirement debt-free is certainly appealing, it may not always be the most strategic move for high-net-worth individuals, especially with current mortgage rates higher than they’ve been in recent years.
• What to Do Instead: Evaluate your mortgage’s interest rate in relation to potential investment returns. If your investments can generate a higher return than the interest you're paying on your mortgage, it might make more sense to keep it and put your money to work elsewhere. Always consider your overall financial strategy and long-term goals when making this decision.

Given the potential for mortgage interest to be tax-deductible, it could be more beneficial to keep the mortgage and allocate those funds to higher-return investments. This approach can help maximize wealth growth during your retirement years.

3. "The Stock Market is Too Risky for Retirement"

• Why You May Be Able To Ignore It: Yes, the stock market can be volatile—but it’s also one of the most powerful wealth-building tools available. Over the long term, equities have historically outperformed other asset classes, and for high-net-worth individuals, there are ways to potentially mitigate the risk.
• What to Do Instead: Rather than avoiding the stock market entirely, consider things like diversification and alternative investments. The right mix of equities, real estate, bonds, and even private equity can potentially provide significant returns while managing risk.

4. "You Should Start Claiming Social Security as Soon as You Can"

• Why You May Be Able To Ignore It: While many people claim Social Security as soon as they’re eligible at 62, this might not be the best option for those who can afford to wait. If you delay claiming Social Security benefits until after your full retirement age (which could be 66 or 67, depending on your birth year), your monthly benefits increase by 8% for every year you wait, up until age 70.
• What to Do Instead: If you’re in good health and can afford to wait, delaying Social Security could result in a larger monthly payout, which will provide more stability for your retirement income later on.

5. "Live Below Your Means, Always"

• Why You May Be Able To Ignore It: The mantra of living below your means has been drilled into our heads as a way to save money. While it’s important to be frugal, there’s also a case for spending wisely and investing in quality—whether that’s in assets that appreciate or experiences that enrich your life. The wealthier you get, the more opportunities you have to leverage your resources, and it’s often better to reinvest your money into higher returns rather than simply cutting back on luxuries.
• What to Do Instead: Focus on value-based spending—investing in things that will contribute to your wealth, health, or happiness. Consider high-quality assets like real estate or investments that will grow in value over time, rather than just scrimping on your day-to-day.

6. "Retirement Is All About Spending Less"

• Why You May Be Able To Ignore It: The traditional view of retirement suggests it’s all about downsizing and cutting back on everything, but that’s not the reality for many affluent individuals.
• What to Do Instead: Rather than simply cutting costs, focus on aligning your spending with your retirement goals. Consider creating a budget that allows for both your lifestyle and your long-term financial security.

In fact, for some, retirement can be an opportunity to spend more—whether that means traveling, supporting loved ones, or donating to charitable causes. If you’ve built up a solid financial foundation, retirement doesn’t have to mean austerity—it can mean living more fully.

7. "You’ll Need Less Money in Retirement"

• Why You May Be Able To Ignore It: One of the most outdated pieces of retirement advice is that you’ll need less money once you retire. While some expenses might go down—like commuting and work attire—many others go up, especially if you plan to travel, pursue hobbies, or support family members. Healthcare costs, in particular, can be much higher in retirement than they are during your working years.
• What to Do Instead: Project your retirement expenses based on your desired lifestyle. Work with a financial planner to account for healthcare, travel, and other activities that may require more income.

8. "You Shouldn’t Take Any Risks After You Retire"

• Why You May Be Able To Ignore It: Retirees often think they need to shift all their investments into low-risk options like bonds or cash. 
• What to Do Instead: Consider a diversified portfolio that includes both low-risk investments (to provide stability) and higher-risk options (to generate growth). As you approach retirement, gradually shift the balance to ensure you can support yourself for the long term.

But for high-net-worth individuals, keeping all your assets in low-risk investments might result in missed opportunities for growth. The goal should be to balance risk with reward, especially if you’re planning for a retirement that could last 30 years or more.

Final Thoughts: Modernizing Your Retirement Plan

While many traditional retirement rules still have their place, it’s important to recognize that today’s financial world is far more complex—and far more flexible—than the one our parents and grandparents navigated. High-net-worth individuals, business owners, and couples in their 50s and beyond can take a more personalized, strategic approach to wealth management.

So my personal advice is to ignore those outdated retirement rules that no longer serve you and instead, focus on building a personalized retirement plan that truly fits your goals, your lifestyle, and your future.

Ready to break free from outdated retirement rules? Reach out to discuss how to build a wealth plan that works for you and your family. You can schedule a complimentary financial consultation with me. I’d be happy to talk.

Please Note: Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Investing involves risk and investors may incur a profit or a loss. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Jeff Green and not necessarily those of Raymond James.