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Are You Making This Retirement Income Mistake?

How much retirement income is necessary for you to retire? After reading much financial retirement advice addressed to consumers, I have concluded that much the retirement advice about saving money for retirement is bad advice because of its limiting assumptions about money.

Most personal finance retirement planning articles refer to the same list of reasons why you should be afraid that you don't have enough money to retire. What are some of these reasons? Most people have not saved enough money. Prices will go up and up. You will probably need more for medical expenses as you age. And worst of all (!), you might live 20-30 years after retirement at age 65 and will probably outlive your money.

Such retirement advice articles explain all the ways you can calculate how much retirement income you will need, what costs will go up and what costs might go down.

Most retirement planning articles assume that you will pay off your mortgage. They also assume that your only sources of retirement income will be retirement funds, pensions, and Social Security.

These articles often help you calculate how much of your nest egg you can safely withdraw each year to avoid running out of money.

As a result of unexamined assumptions, these articles omit any consideration of the single most important skill required to live those 20-30 years beyond retirement age in abundance: how to make money. Instead, they teach fear.

Every single one of these money fears is based on a single assumption. After you retire from your job, your retirement income will be fixed because you won't earn any more money.

This is one of the biggest money limitations imaginable. You must anticipate an uncertain future in which the money available to you is limited by the amount of money you amassed in your earning years.

If you believe the unexamined assumptions behind typical personal finance retirement planning advice, you must plan to live 20-30 years without making any new money. Whatever money you earned in your working life is the sole basis for what you will have in your future.

This type of retirement advice also depends on an unstated assumption that the amount of money you have available to you as retirement income also depends on the decisions of other people.

Your retirement income depends on what other people decide about your pension, your Social Security payments, and interest on various "safe investments," such as savings accounts and certificates of deposit.

Such articles create a very real fear because they teach you that your only strategy to create a secure future lies in the present rather than in the future. They assume that the only way to be secure in the future is to amass as much money as possible while you are still young enough to earn an income. Then you must look forward to being very careful with your money in the future so that you will not outlive your money. This retirement advice assumes that you will have no other sources of additional income in your future.

These articles tell you that you are powerless to increase your retirement income after you retire from your job. This is the most damaging assumption behind much retirement advice.

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Kalinda Rose Stevenson, Ph.D. Learn the difference between earning money and making money in a real estate investing book, "No Money Limits." Go to www.NoMoneyLimits.com to get your Free "52 Heart of Money Insights." Click here to get your own unique version of this article.

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