I don’t trust many of the institutions and individuals who operate in the financial world. It recently occurred to me that much of my retirement planning is based on that lack of trust. There are plenty of examples of this.
< First, I no longer trust big banks to be responsible with their fees or to offer the best account benefits for retirement savers. Thus, we fired Bank of America in 2010 and moved to a community bank with a rewards (i.e. high interest) checking account.
I distrust financial advisers who make their money based on selling investment products or managing your investments. Instead, I continue to educate myself on investing and retirement planning as a DIY financial planner.
I don’t trust the mediocre retirement options offered inside a conventional 401(k) plan. The choices are limited and the expenses associated with them are too high. I opted instead to use a self-managed brokerage account inside my plan. This gives us more investment options to lower costs, increase diversification, and allow us to use stop limit orders to lower risk.
I don’t trust the stock market with our financial survival. I also don’t trust the 4% withdrawal rate “rule of dumb.” Instead, I am following a different path for providing a guaranteed retirement income.
I know this list can be expanded with other retirement planning concepts based on a distrust of financial institutions. At least on the financial side of retirement planning, a healthy dose of skepticism can be a positive attribute.
Do you agree?