Don’t Follow Standard Financial Advice!

Lew W.
4 min readOct 25, 2021
Photo by Kalen Emsley on Unsplash

Most financial advisors will suggest accumulating at least $1,000,000 for retirement. Depending on where you want to retire, this amount could be two to three times that amount.

Edit: Now some financial advisors are suggesting you will need at least $4,000,000 in order to retire comfortably.

According to Carrie Schwab-Pomerantz senior vice president at Charles Schwab & Co., you will need 25 times your yearly expected living expense. The reason Schwab-Pomerantz and others suggest these amounts is that it’s expected that you will withdraw from your savings each month or year.

That means that you will need to have $1,000,000 to be able to withdraw $40,000 per year for 25 years. This is the most short-sighted advice that I think anyone could ever give!

It is pretty easy to save this amount if you are in your 20s and earning 5%-8% per year by simply investing in an index fund, but what about in your 30s or 40s? It becomes increasingly difficult to save that amount! And, let’s face it when we are in our 20s or even in our 30s, most of us aren’t thinking about retirement.

Mainly, we aren’t making our maximum income yet because the experience in the chosen field hasn’t accrued enough to earn a significant income. A coworker once told me, “they aren’t going to pay you anything until you’re 40”!

After thinking about it, I knew that he was right. You haven’t proven yourself and accumulated the experience to earn your maximum.

Have you ever wondered why older men are buying newer, expensive cars, boats, etc.? It’s not because they are having some psychologically induced mid-life “crisis”! It’s because they now have the money.

Not only do they earn more, but their kids are probably grown, and they have downsized their house, giving them more time and money to enjoy the fruits of their labor. But this is also about the time when most start thinking about retirement, which isn’t the best time to start saving.

To avoid following this extremely absurd advice do not touch your savings principal no matter when you started saving. Live off of your retirement savings by not draining your principle!

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