Retirement Answer Man

It’s easy to say don’t live your life based on assumptions. But how can we do that in retirement when assumptions are our way of managing uncertainties? Assumptions are basically just guesses at things we don’t know. And we need to make some assumptions to create a retirement plan. So today we’ll finish off the setting your retirement assumptions series by exploring 5 rules for setting and managing retirement assumptions. Join me to learn how you can make good assumptions so that you can rock retirement.

5 Rules for making and managing assumptions

  1. Recognize the assumptions you need to make. Even if you don’t like to make assumptions, you still have to make some to effectively plan your retirement. It’s important to recognize the assumptions that are important to retirement planning. There are obvious ones like inflation, rate of return, and longevity. But some may not be as obvious. Spending rhythms are difficult to understand in retirement and challenging to predict. You also may not understand how to live a life without the boundaries that have constrained you for your whole life. 
  2. Investigate the data surrounding your assumptions. Don’t just assume blindly. Do your research. It’s good to start with historical data, but you can also think about more personal factors. One example is with longevity. You should consider your personal health and family history when estimating your own longevity.
  3. Beware of making extreme assumptions. This one can be challenging in the times of COVID-19. We tend to start believing in extremes when faced with extreme situations.
  4. Determine which assumptions have the biggest impact on your life. Next identify which ones you can control. Where those two meet is precisely where you want to focus your time and energy.
  5. Don’t trust your assumptions. Although we need our assumptions to help plan for retirement, we can’t trust them fully. This is where being agile comes into play. When you are agile you can find the blips on your dashboard and then readjust your model accordingly. Agile retirement planning can help you keep your model up to date and relevant as life changes.

Why is identity such a big issue for retirees?

When you retire you lose your work identity and your identity as a wage earner. It can be easy to become lost. But instead of lamenting the loss of what was you can instead take this opportunity to create a new identity that you choose. You can create this identity based on who you really are. So give it some thought, who do you want to be in retirement?



  • [3:00] 5 Rules for making and managing assumptions


  • [16:10] Why is identity such a big issue for retirees?


  • [28:00] Go through these rules think about how you will manage your retirement assumptions

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM327.mp3
Category:general -- posted at: 6:00am CDT