How Limiting Beliefs Foil Your Retirement Goals

photo-1435771112039-1e5b2bcad966I recently listened to a podcast by Michael Hyatt titled, “What if the Barriers Were Only in Your Head?” The general idea was that we all have limiting beliefs that get in between us and what we want to achieve in life.

Like you, I don’t really think I, myself, have any limiting beliefs. Maybe other people yes, but surely not me. Nevertheless I thought I would tune in just to see what limiting beliefs others may have. My interest in this podcast was purely for educational and research purposes, of course.

Turns out I may be just a little bit guilty of a few beliefs that limit my ability to reach my goals.

Perhaps you are as well.

While Hyatt’s list of limiting beliefs included things like I am to old or too young; too short or too tall; not smart enough or over qualified, I started to wonder what types of limiting beliefs may be standing in the way of reaching your financial goals.

Following are some common beliefs that might stand between us and our financial goals:

“The market is too high” or too risky, too volatile, too … Pretty much any idea that starts with “the market …” has good potential to be a limiting belief. I have heard comments about the market being too high for my entire career. When I started in 1992 the Dow Jones Industrial Average was at 3000. Today it’s over 18,000. Of course we’ve had our setbacks and more will come. Some of them have been quite significant, but in general the stock market has appreciated significantly over the past two decades. As long as the economy grows, the stock market will grow with it – though not always in lockstep.

“I don’t understand investments”. Or the very similar “investments just aren’t my thing”. You don’t have to be an investment expert, but you should at least understand the basics. These days there is more information available in more ways than ever before. Crack open a book. Spend some time on your company’s retirement plan website. Peruse a prospectus. Subscribe to a business or personal finance newspaper, magazine or even a blog.

“I might not live that long”. I attribute this one to my cousin who at the age of thirty once said, “Why save money for retirement? I might not even live that long.” We all need to balance living in the moment with saving for the future. Neither extreme is a good idea. However, unless you plan to live fast and die young, odds are you will live to see retirement. To ensure you maintain your current standard of living in retirement, plan on it and plan for it.

“I think my husband (or wife) has that all taken care of”. Don’t bet your future financial security on the belief that someone else will take care of you. Women especially need to be concerned about their financial security in retirement. According to research by US Allianz, through death, divorce or by choice, most women will eventually be in control of their family’s finances – if they are not already. Interestingly, when asked what financial advice women would pass on to their daughters and granddaughters, the same survey found the most popular answer to be “don’t rely on others for your financial security.” As the father of two daughters, I couldn’t agree more.

“In retirement I won’t need much money because my house will be paid off”. Hopefully that’s true for you, but for many retirees it is not. The Consumer Financial Protection Bureau reports that in 2011, 30% of people age 65 and older had mortgages on their home, up from 22% a decade earlier. Even if your mortgage is paid off other expenses in retirement like healthcare will increase offsetting any savings you may get when your mortgage is paid for. Fidelity Investments 2014 Retiree Health Care Cost Estimate estimates that after you factor in premiums, deductibles, co-payments and other expenses, the average 65-year old couple will spend over $220,000 on health care after they retire.

“I will never retire”. Or “I plan to work to age 70”. Frankly, I like both those ideas and I tend to share those beliefs myself. One of my wealthiest clients is a 75-year old waitress. She still works two to three days a week. Another client was a successful salesman well into his 70’s. However, the average age at which most people actually retire has been stubbornly stuck at 62 for decades. This risk in thinking that you will work forever is that you don’t save enough for retirement during your working years. While our intentions are good circumstances such as our health, the economy or other factors often dictate when we retire – whether we like it or not.

I am sure you have one or two limiting beliefs that you could add to the list. I confess to the last one.

What limiting beliefs stand between you and your goals? Be honest.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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