Htown Harry
Thinks s/he gets paid by the post
- Joined
- May 13, 2007
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Michael Kitces has posted an interesting essay that examines some of the common phrases used in retirement planning. The concepts he discusses are frequent subjects here on E-R.org.
[-]probability of failure[/-] probability of adjustment
[-]probability of success[/-] probability of excess
[-]retirement income[/-] retirement cash flows
[-]retirement[/-] financial independence
What words would you banish from retirement planning discussions? Why?
He proposes the following substitutions:As the research into behavioral finance has shown, the words we use and how concepts are framed can have a powerful impact on how we see the world and consider the opportunities that may lie before us. A strategy can go from being appealing to terrifying based solely on how it’s explained. And in the context of retirement, there are a lot of words and phrases that may unintentionally be hampering our efforts to have a productive planning conversation.
[-]probability of failure[/-] probability of adjustment
[-]probability of success[/-] probability of excess
[-]retirement income[/-] retirement cash flows
[-]retirement[/-] financial independence
Financial Independence In Lieu Of Retirement, And Other Phrases That Should Be Banished From Retirement Planning | Kitces.com...reframing retirement as financial independence goes beyond just what one will do in that “retirement” phase; it also changes the context of the retirement goal, where the target instead is simply to reach that point of financial independence, and to recognize that the accumulation of assets is just part of the transition of replacing income-from-work with cash-flows-from-assets instead. The approach allows for a much more productive transition into “partial retirement” as well; after all, for many people, their “financial independence” job might actually still be a job that does generate some income, which means the transition point to “financial independence” may be far closer than what it takes to “fully retire” instead.
What words would you banish from retirement planning discussions? Why?