Most important decisions should be based on the evidence. The sad truth is, in the financial world people don't make their decisions the evidence.
In the medical world, decisions are made based on the evidence. In the legal world decisions are based on the evidence. Most important decisions should be based on the evidence. In the financial world, you would think people would make their decisions based on the evidence.
The sad truth is, in the financial world people don't make their decisions the evidence. They make their decisions based on what everyone else is doing. The problem is almost everyone else will run out of money in retirement if they live long enough. If you made your financial decisions based on the evidence, you wouldn’t be putting your hard earned dollars into a 401(k), 403(b), IRA, or any other qualified plan.
Let’s look at the evidence:
1. Studies show the average qualified plan runs out of money in about 12 to 14 years because of taxes and inflation. If you retire at 65, you can expect to run out of money right smack in the middle of retirement between age 77 and 79.
2. Most qualified funds are invested in the stock market and the stock market crashes about every four to six years.
3. Ninety-seven percent of Americans will run out of money in retirement if they live long enough.
4. There is an army of financial advisors, certified financial planners, and CPAs advising their clients to put the maximum amount of money possible into some type of qualified plan. Remember: Financial advisors and certified financial planners make their money based on how much money you put into one of their plans.
5. A CPA’s job is to save you in taxes THIS YEAR. Their goal is to have you come back to do your taxes again next year. They are not concerned about how much in taxes you'll be paying in retirement. When they say you'll be in a lower tax bracket in retirement, they are not considering the inflation factor.
Now that you’ve seen the evidence, I want you to think like a physician and answer this one question:
Based on the evidence, has that army of advisors been giving good advice or bad advice?
Here's another question:
If you were getting bad advice, when would you like to know?
Maybe it's time to rethink how you save for retirement.
If any of this hits home, it's time to start gathering information to learn better ways to build the retirement you want. When you have any doubts, go back and look at the evidence again. It is my desire to educate you enough so that you can make decisions on your own. Remember there's a reason you make medical decisions based on the evidence. Trust your medical training and apply it here.
If you have questions send me an email to David@TheAlemianFile.com. Check out my website PhysiciansRetirementPlan.com. Follow me on Twitter, connect with me on LinkedIn, and absolutely make sure you come back here next week to Physicians Money Digest for another edition of The Alemian File.