One of my favourite guilty pleasures is to watch the TV show “Myth Busters” on The Discovery Channel.
It’s a great way to kill half an hour when there is nothing else on and learn how urban legends and Hollywood stunts either do or don’t work in the real world. In particular I remember one episode where the hosts deconstructed a scene from Raiders of the Lost Ark. Indian Jones tosses a rod through the spokes on a motorcycle’s front wheel causing the bike to flip forward and throw the rider twenty feet into the air. With a really big explosion to boot!
Spoiler Alert! – physics doesn’t work that way, the force required to change the trajectory of someone on a speeding motorcycle from forward to vertical is far greater than would be provided by a simple iron rod, not to mention the fact that nothing about the scenario would suggest any kind of explosion. It’s still a pretty cool effect though, watch the clip here…
We are surrounded by these kinds of myths every day. Most of them are just harmless entertainment but believing certain things as they are portrayed in the media and perpetrated through urban legend can be harmful. Not the least of which are some of the myths we’ve been taught to believe about retirement planning.
Earlier this month I found this following article in the Wall Street Journal. “Five Retirement Myths That Could Cost You.”
Now granted this article takes things from a US perspective and I am the last person who would suggest Canadians take seriously a lot of advice they get from south of the boarder, I’ve written on the pitfalls of that strategy before, but a lot the principles, if not the actual practices still apply.
Points 4 and 5 are especially worrisome to me as a Financial Advisor. I can’t tell you the number of times I’ve counselled people in their early retirement years who are shocked to learn that their expenses did not drop as much as they thought they might, in a lot of cases expenses actually rise in early retirement when, as the article suggests, people have nothing but time on their hands and are still in relatively good health. What else is there to do but spend money on things you didn’t have time to do before? Golfing everyday isn’t free after all!
And what about your health care? While most prescription drugs are covered by the Ontario Health Plan for Seniors many are not, and the benefit doesn’t start until you turn 65. What if you decide to retire early? Neither does the plan cover other things usually taken care of by company health plans like dentists and optometrists.
Most myths and urban legends like the ones portrayed on Myth Busters are just fun facts to ponder but when it comes to your retirement why take the risk? Get the facts first, what you don’t know can hurt you. For more information and a free personal retirement consultation write to: firstname.lastname@example.org