Retirement Retirement Planning

10 Retirement Rules That Are OK to Break

Not all retirement rules are set in stone — here’s when you can bend them.

Senior couple sitting by lake
Updated Oct. 1, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

When it comes to planning for retirement, there’s no shortage of advice telling you exactly what you should be doing. But not all of that advice is absolute. While some rules offer helpful guidelines, they can sometimes be outdated or too rigid for today’s retirement landscape.

The good news is that some of these so-called “rules” are totally fine to break — if done thoughtfully. Here are 10 retirement rules you don’t have to follow to the letter.

Steal this billionaire wealth-building technique

The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.

A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.

If you have at least $10K to invest and are ready to explore diversifying beyond stocks and bonds, see what Masterworks has on offer. (Hurry, they often sell out!)

The 4% rule

LALAKA/Adobe long term investment for retirement

The 4% rule suggests that you can withdraw 4% of your retirement savings annually to ensure your money lasts 30 years. While this rule has been a staple of retirement planning for years, it may not be as reliable today due to fluctuating markets and rising life expectancies.

Why you can break it: The 4% rule doesn’t account for the fact that your spending may change over time, and markets don’t always behave predictably.

A more flexible strategy is to adjust your withdrawals based on market conditions or your current needs, making sure you can stretch your savings across a potentially longer retirement.

Saving to replace 70%-80% of your pre-retirement income

H_Ko/Adobe man grabbing savings jar greed concept

Conventional wisdom suggests you should aim to replace 70%-80% of your pre-retirement income to maintain your standard of living. While this can be a good target, it doesn’t apply to everyone.

Why you can break it: Your income needs in retirement may be significantly different depending on your lifestyle, health, and location. Some retirees need less than expected, while others may want to spend more on travel or hobbies.

Focus on creating a personalized budget that fits your unique retirement goals rather than sticking to a rigid percentage.

Not filing for Social Security before full retirement age

Andrey Popov/Adobe hand filling Social Security Benefits Form

You’ve likely heard that waiting until full retirement age (FRA), which is 66 or 67 depending on your birth year, to claim Social Security benefits will maximize your payout. While true, waiting isn't always the best option for everyone.

Why you can break it: If you need the money sooner or have health concerns that may limit your life expectancy, it can make sense to start collecting benefits early.

The key is to understand how claiming early will affect your long-term benefits and weigh that against your immediate financial needs.

Earn $200 cash rewards bonus with this incredible card

There's a credit card that's making waves with its amazing bonus and benefits. The Wells Fargo Active Cash® Card(Rates and fees) has no annual fee and you can earn $200 after spending $500 in purchases in the first 3 months.

The Active Cash Card puts cash back into your wallet. Cardholders can earn unlimited 2% cash rewards on purchases — easy! That's one of the best cash rewards options available.

This card also offers an intro APR of 0% for 12 months from account opening on purchases and qualifying balance transfers (then 19.74%, 24.74%, or 29.74% Variable). Which is great for someone who wants a break from high interest rates, while still earning rewards.

The best part? There's no annual fee.

Click here to apply now.

That you have to fully retire

Mediteraneo/Adobe senior woman working at flower shop

The traditional idea of retirement involves completely leaving the workforce, but more people are finding that partial retirement or part-time work offers a better balance.

Why you can break it: Continuing to work part-time in retirement can provide additional income, keep you mentally and socially engaged, and reduce the pressure on your retirement savings.

Plus, working beyond the traditional retirement age may even boost your Social Security benefits.

That you have to wait until age 65 to retire

Rido/Adobe senior woman reading book at home

Age 65 has long been considered the “normal” retirement age, perhaps because it's when Medicare eligibility begins. However, there’s no hard rule that says you must wait until then.

Why you can break it: If you’ve saved enough, you can retire earlier than 65. On the flip side, delaying retirement until after 65 might be more beneficial for some, especially if you want to increase your savings or wait for a higher Social Security payout.

Ultimately, the right time to retire depends on your financial situation and personal goals.

That you have to depend on Social Security or your pension alone

Vorda Berge/Adobe happy senior couple using smartphone

Many retirees assume that Social Security or a pension will provide the bulk of their retirement income, but this can be risky given the uncertainty around future benefits.

Why you can break it: Relying on Social Security or a pension alone may not be enough, especially with rising costs of living. Diversifying your income streams — through investments, real estate, or part-time work — can offer more security and financial flexibility in retirement.

Clinging to your original family home

Daniel/Adobe senior couple buying new house

Many people think they need to stay in their family home throughout retirement. While it can be comforting to hold onto a familiar space, it’s not always practical.

Why you can break it: Downsizing to a smaller home can free up equity, reduce your living expenses, and simplify your life. Plus, moving to a location with a lower cost of living can stretch your retirement savings further, allowing you to enjoy more financial freedom.

Sticking with the same asset allocation throughout retirement

agenturfotografin/Adobe senior woman checking her investment

The common advice is to move your investments into safer assets like bonds as you approach retirement. While reducing risk is important, this doesn’t mean you should abandon growth-focused investments entirely.

Why you can break it: With people living longer, your retirement could last 30 years or more, meaning you still need growth to outpace inflation.

A diversified portfolio that balances both growth and security is a smarter way to ensure your savings keep up with your spending needs over time.

Never tapping into your home equity

zimmytws/Adobe coin jar Home Equity

Home equity is often viewed as something to leave untouched in retirement unless absolutely necessary. However, your home is one of your largest assets, and it can be a useful source of income in retirement.

Why you can break it: If you're short on retirement savings, using a reverse mortgage or selling your home could provide a valuable source of income. It’s important to explore all your options, especially if you want to remain in your home for as long as possible.

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today” 
  • Create your account (important!) by answering a few simple questions 
  • Start enjoying your discounts and perks!

You’ll also get insider info on social security, job listings, caregiving, and retirement planning. And you’ll get access to AARP’s Fraud Watch Network to help you protect your money, as well as tools to help you plan for retirement.

Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.

Become an AARP member now

Always sticking to your original retirement plan

goodluz/Adobe modern senior couple going through remodelling ideas on tablet

Many people develop a retirement plan early in life and assume they’ll stick to it. While having a plan is important, life doesn’t always go according to schedule, and your needs and circumstances will likely change over time.

Why you can break it: Flexibility is key to a successful retirement. Don’t be afraid to revisit and adjust your plan as you age, whether it’s rethinking your spending, tweaking your investment strategy, or reconsidering your retirement timeline.

Staying adaptable will help you navigate the uncertainties of retirement more effectively.

Bottom line

wavebreak3/Adobe senior african american couple taking a selfie

While traditional retirement rules offer a helpful framework, they aren’t one-size-fits-all. As retirement landscapes evolve, it’s essential to remain flexible and find strategies that work for your unique situation.

Are you following rules that no longer make sense for your financial goals? Consider rethinking the conventional wisdom and crafting a plan for a stress-free retirement.

Lucrative, Flat-Rate Cash Rewards

5.0
info

Wells Fargo Active Cash® Card

Current Offer

$200 cash rewards bonus after spending $500 in purchases in the first 3 months

Annual Fee

$0

Rewards Rate

Earn unlimited 2% cash rewards on purchases

Benefits and Drawbacks
Card Details


Author Details

Adam Palasciano

Adam Palasciano is a personal finance-obsessed and money-savvy individual who loves to hash out content on all things saving money. He specializes in writing millennial-friendly personal finance content, covering topics ranging from trending financial news, debt, credit cards, cryptocurrency, and more.