Why Retirement Isn’t One-Size-Fits-All And How to Create Your Own Plan

When it comes to retirement planning, we see people struggling with the same challenge over and over again: the sheer amount of advice out there. Between TV pundits, financial blogs, YouTube, and Google searches, you’ll find plenty of “rules of thumb” for retirement. The problem? These rules often oversimplify your situation and can leave you either overconfident or overwhelmed. In fact, studies show 30% of people rely on Google for financial advice, while only 22% seek professional guidance. That’s why we always say don’t let generalities shape one of the most important financial decisions of your life.

Take the popular rule that you need $1 million to retire. Does it work for some people? Sure. But for others, it’s either not enough or far more than they’ll ever actually need. Retirement isn’t about hitting a magic number. It’s about your spending needs, your sources of fixed income (like Social Security or pensions), and the lifestyle you want to live. Similarly, the 4% withdrawal rule—the idea that you can withdraw 4% annually from your savings is a decent starting point, but it doesn’t account for personal circumstances like health care costs, market volatility, or inflation.

Another myth is that you’ll spend 80% of your pre-retirement income. Some people actually spend more in retirement because they finally have the time to travel, enjoy hobbies, and help family. Others spend less because they no longer commute or support kids. The point is, there’s no one-size-fits-all percentage. The same goes for the old advice to save 10% of your income. For late starters, that’s probably not enough you might need to save 15-20% to catch up.

Investment allocation rules can also be misleading. The outdated formula of subtracting your age from 100 to decide your stock allocation doesn’t account for your personal risk tolerance, income needs, or goals. Some 70-year-olds are comfortable with a higher stock allocation because they have pensions or other income sources; others prefer more conservative mixes. Instead of following shortcuts, it’s far more important to align your allocation with your actual financial picture.

And then there’s market timing advice like “buy on the dips.” It sounds smart, but in practice, it usually hurts more than it helps. We encourage people to stick with a consistent investment strategy rather than guessing when markets will rise or fall. Long-term consistency beats short-term speculation almost every time.

That said, a few rules of thumb can be helpful as rough guides. The Rule of 25 is a good way to estimate your nest egg: multiply your annual spending needs (after accounting for Social Security and pensions) by 25 to get a target savings number. The Rule of 72 is another useful tool it shows how long it takes your investments to double. At 6% growth, your money doubles in about 12 years. These aren’t precise blueprints, but they’re handy ways to visualize your trajectory.

When it comes to saving, we recommend a clear order of operations: first, contribute to your 401(k) up to the employer match (that’s free money). Next, max out a Roth IRA if you’re eligible. Then go back and put more into your 401(k). Finally, put extra into a brokerage account for flexibility. And don’t overlook the basics like having an emergency fund of 3-6 months’ expenses. If your job is unstable or your income varies, you may need even more.

Life insurance is another area where rules of thumb need tailoring. You’ll often hear to buy coverage equal to 10 times your salary. That’s a reasonable starting point, but real needs depend on your age, your debt, and who depends on you financially.

We also get questions about target date funds, like from Julie in Scripps Ranch. If you delay retirement, you might need to move into a different target date fund that aligns with your new timeline. But target date funds aren’t the only option you can also reassess your allocation entirely and build something more tailored.

At the end of the day, rules of thumb are fine for ballpark estimates, but they shouldn’t drive your retirement plan. Retirement is too important for shortcuts. What really works is personalized planning based on your goals, risk tolerance, and financial reality. That’s why we built our DIY Retirement Guide to give people tools to craft their own strategies. And if you want professional insight, our team at Pure Financial Advisors offers free assessments and educational Lunch N Learn sessions to help you build a roadmap you can trust.

The bottom line? Don’t settle for generic advice. Retirement success comes from creating a plan that’s yours because your future deserves more than just a rule of thumb.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.