5 Ways Wishful Thinking Can Damage Your Retirement

A little hope is good for the soul, but when it comes to retirement planning, wishful thinking can lead to serious financial mistakes. Today, we’re walking through five common examples of wishful thinking that can quietly damage your retirement and how you can build a plan that protects your future instead of relying on luck.

 

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

 

----more----

Transcript: 

 

Marc:

A little hope is good for the soul, but when it comes to retirement planning, wishful thinking can lead to some serious financial mistakes. So we want to talk about a few ways wishful thinking could possibly damage our retirement this week on Plan with the Taxman.

 

What's going on, everybody? Welcome into the podcast. Thanks for hanging out with Tony Mauro and myself as we talk invest and finance in retirement. Tony is a CPA, CFP, and an EA with 30-plus years of experience, and he is the Tax Doctor at Tax Doctor Inc., serving you all around the, well, Iowa and other areas as well. He's got clients all over the place. But we appreciate your time here on the podcast. And this week, we got a few wishful ways that, wishful thinking ways, I guess, that maybe could damage us, Tony. And there's nothing wrong with being optimistic and hopeful. Well, that's all good stuff. But you want to not kind of carry that so far, I guess, that it clouds your judgment and costs you in the end, right?

 

Tony Mauro:

That's right.

 

Marc:

Yeah.

 

Tony Mauro:

Some of these topics are some we hear all the time.

 

Marc:

All the time? Well, we'll try to tackle some of the biggest ones for you.

 

Tony Mauro:

Yeah.

 

Marc:

You doing all right this week?

 

Tony Mauro:

I'm doing good. Yeah. I mean, we're getting ready to spend a little more time outside, although the weather here is cool.

 

Marc:

I think it's cool across the country, actually, a little bit.

 

Tony Mauro:

Yeah.

 

Marc:

In some places.

 

Tony Mauro:

A lot of rain and stuff.

 

Marc:

Yeah.

 

Tony Mauro:

Hoping for something warmer.

 

Marc:

Yeah. Yeah, for sure. Well, that's wishful thinking, right?

 

Tony Mauro:

That's wishful thinking on my part. Yep.

 

Marc:

Well, let's get into a couple of these and talk about it. We got to go with a standard classic, really, financial myth, I think, and that's the wishful thinking thought of, "I'll be in a lower tax bracket once I retire, so that's going to help me out from my cost savings standpoint," or whatever. And Tony, I've been talking with you for years and lots of other financial professionals, and they all tell me the same thing, that more times than not, people are in the same tax bracket when they retire, not a lower one. What's your thoughts?

 

Tony Mauro:

That's correct. Yeah, we find that too. It's the same or sometimes even higher depending on what they have coming in and how that is going to be taxed. And I mean, the traditional thinking is that, "Hey, my expenses are going to go way down, my income is going to go way down, and so therefore my bracket will go way down." But a lot has changed even with the brackets. There's not as big of a spread in each one, so they don't go down by that much. But a lot of times, people that have definitely planned and saved and are bringing in money, passive income from retirement sources, that a lot of times is the same or higher income than when they were working, which is a great thing, but they don't drop tax brackets, so we got to be very efficient about taking it out.

 

Marc: