It can be overwhelming to think about all the different factors that go into retirement planning, such as investing, taxes, withdrawal strategy, and social security. I always like to start by answering listener questions and applying them to the topic at hand.

These 3 early retirement myths can hold you back and you'll learn how to avoid them so you can focus on what's truly important. So let's dive in and bust some myths!

About Me:

I'm the Vice President and a Financial Planner at Root Financial Partners. I'm also the host of the Early Retirement podcast. I specialize in helping people invest, save on taxes, and create an overall financial strategy to get the most life out of your money.

I also recorded a podcast on this topic if you prefer to listen: Top 3 Early Retirement Myths

Myth #1: You Must Pay Off Your Mortgage Before Retiring

This is a common belief, but it's not always the case. In fact, it really depends on your individual circumstances. For example, if you have a low mortgage rate and other investments that are earning a higher return, it might make more sense to continue investing and pay off your mortgage slowly over time. On the other hand, if you have a high mortgage rate and no other investment opportunities, paying off your mortgage as quickly as possible could be a smart move (plus the peace of mind it brings has to be accounted for).

I tell my clients (who have probably heard of my jokes too often at this point) that you don't throw a party with friends when your investments rise by $500,000+, but you do celebrate (both mentally and emotionally with friends/family) when you pay off your mortgage!

It's important to carefully consider your options and make a decision that aligns with your overall financial goals. Remember, there's no one-size-fits-all answer when it comes to retirement planning. That's why it's so important to take the time to understand your own financial situation and make a plan that works for you.

Myth #2: You Need Dividends To Make Up All The Income You'll Need In Retirement

While dividends can be a useful source of income in retirement, they're not the only option. In fact, there are many different ways to generate income in retirement, including investments, social security, rental income, inheritance, and pensions.

The key is to focus on replacing your income, rather than trying to hit a specific savings target. This means figuring out how much you'll need to live on each month and then finding ways to generate that income. For some people, dividends may be an important part of their retirement income strategy, but for others, they might not be as important.

It's important to carefully consider your options and make a plan that works for you. Don't get fixated on one particular income source – instead, think about the bigger picture and how all of your income sources can work together to support your retirement goals.

One thing to keep in mind is that dividends are essentially a payment from a company to its shareholders as a way of thanking them for investing in the company. While receiving a dividend can feel good, it's important to consider what the company could do with that money if it were reinvested into the company instead. This is known as total return, which is the combination of dividends and capital appreciation.

Myth #3: As You Get Older, You Need To Have A "Less Risky" Portfolio.

The reality is that the real risk in retirement isn't the ups and downs of the market – it's the risk of running out of money. In order to protect against this risk, it's important to have a mix of investments with different levels of risk and return potential.

I have clients with 100% stocks and 0% in bonds and have no plan to minimize this allocation for the rest of their lives. I have other clients who don't have almost anything in stocks because of the type of income sources that make up the majority of their retirement income.

One thing to consider is that as you get older, you'll need more conservative assets to pull from in order to generate income. This doesn't mean you need to completely abandon growth investments, but it does mean that you need to be strategic about how you balance your portfolio.

One way to do this is by following what's known as the guardrails approach (developed by Jon Guyton), which allows you to take a certain percentage of your portfolio (5.2% - 5.5) as income each year without running the risk of running out of money. This approach takes into account a variety of factors, including your age, investment time horizon, and the makeup of your portfolio.

Ultimately, the key to successful retirement planning is to focus on creating a balanced and sustainable income stream that meets your needs and goals. By keeping these myths in mind and being mindful of your investment strategy, you can set yourself up for a comfortable and secure retirement.


The first myth is that you need to pay off your mortgage before retiring. While it may feel good to have a mortgage-free home, it may not necessarily be the most financially sound decision. Consider whether you can do better than the mortgage interest rate by investing the extra money. 

The second myth is that you need dividends to make up your income in retirement. Consider whether a company would be better off reinvesting dividends into growth rather than paying them out to shareholders. 

The third myth is that as you get older, you need to have a less risky portfolio. The risk in retirement is not about short-term market fluctuations, but rather the risk of running out of money. Consider a custom strategy that takes into account your specific goals and living expenses, rather than blindly following a set asset allocation formula (I'm anti "cookie-cutter").

You guessed it, I help people retire early.

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P.S. Before anyone decides to move forward with our services, we want to ensure we're the best fit to help you reach your goals. We go through an in-depth planning process to show you exactly what it looks like to work with us.