Getting Real About Retirement Realities - Ep #87

Welcome to episode 87 of the One for the Money podcast. Retirement is the ultimate dream for many, but there are realities of retirement that everyone needs to be aware of. Better retirement planning will incorporate these realities so it leads to a better life in retirement.

In the tips, tricks, and strategies portion, I will share ten tips when you are 10 years from retirement.

In this episode...

• Your Biggest Expense Isn’t What You Think [2:08]
• Your Biggest Fear is Misplaced [3:20]
• Regret is More Common Than You Think [4:40]
• The Real Risk Isn’t a Market Crash [5:08]
• Your Most Expensive Years Are… Surprising [5:59]
• Your Health = Your Wealth [6:26]
• Identity Crisis Incoming [6:48]
• Estate Planning is About More Than Money [7:30]

We often forget that retirement is only a recent invention. It hasn’t been around for that long. For most of human history, people worked until death or until their family could care for them when they were unable to work any longer. Retirement allows one to enjoy a life of leisure even though one is still capable of work. It really is a more amazing concept than we give it credit, and it truly is an absolute luxury of both the modern and first world. It’s amazing to think that a person can work and invest for 30-40 years and then live off that work for another 30-40 more years.

Your great-grandparents would’ve thought that was science fiction. And honestly, for billions around the world, it still is.

If you are literally and figuratively fortunate enough to enjoy such a dream as retirement, here are the most important retirement realities as I see them.

💸 Retirement Reality #1: Your Biggest Expense Isn’t What You Think

When I ask people to guess their largest retirement expense, I hear the usual suspects: housing, healthcare, maybe travel, or groceries. But nope. The winner — and it's not even close — is taxes.

Yes, Uncle Sam (and sometimes Cousin State) will still want a piece of your pie. Social Security? Taxable at the federal level and in some states. IRAs and 401(k)s? You bet. Medicare surcharges? Yep, that’s a thing.

But here’s the kicker: the folks who pay the least in taxes during retirement aren’t lucky. They’re prepared. They’ve been implementing smart tax strategies years — even decades — before they stop working. We’re talking Roth contributions, conversions, HSAs, pre-tax vehicles, cash balance plans — all the good stuff.

And to do it right, you need a plan customized to your current and future tax situations. That’s exactly what we do for our clients — because the less you pay in taxes, the more you can spend on what actually matters: time, travel, and tacos with the grandkids.

😱 Retirement Reality #2: Your Biggest Fear is Misplaced

Everyone fears running out of money. But statistically, what they should be afraid of… is dying with too much.

No joke — a study by the Investments and Wealth Institute found that 84% of retirees only spend the earnings from their portfolios. They never touch the principal. It's called the "decumulation paradox." They’ve got the money — they’re just afraid to use it.

Why? Two big reasons:

1. Lifelong savers have trouble flipping the switch to spending mode.
2. The “just in case” fund: just in case the kids need help, or a health crisis hits, or Aunt Sally’s dementia story plays on repeat in your mind.

But here's the thing — the real tragedy isn't running out of money. It's running out of time to enjoy it.

Using the well-known 4% rule, retirees in over two-thirds of cases ended up with twice their original wealth, even after withdrawing every year.

So yeah, have a plan. But make it one that helps you live now, not just preserve your balance...