8 Traditional Retirement Rules People Have Abandoned in 2025

The old rules of retirement might be losing their grip.

Changing economies and lifestyles are reshaping what post-career life might look like. Here are some retirement "rules" people are rethinking, and what these changes could mean as you prepare for retirement.

The notion of having a "magic number," such as $500,000, $1 million, or more, before retiring, is starting to become outdated.

Many retirees now recognize that expenses, lifestyle choices, and where they live can vary too much for one-size-fits-all math. Life often throws curveballs at us, and it's important to be able to react to changes as they occur.

For today's retirees, it's less about hitting a fixed number and more about creating a strategy that can help them adapt as life changes.

Many of us continued to spend throughout our 20s, 30s, and 40s, believing there would be plenty of time to catch up on retirement savings later.

With age comes wisdom, and older people may now regret waiting to save. Compound interest rewards early savers. Even small contributions in your 20s or 30s can grow into substantial assets later down the line.

More people than ever understand that saving early and often is a much better way to build a nest egg.

Relying on Social Security as your main retirement source of income is a gamble that fewer people are willing to take.

In fact, the program was never intended to serve as the main source of income for retirees, as the Social Security Administration (SSA) itself points out.

And as everyone knows, Social Security is in financial trouble and will not be able to continue paying out full benefits unless the federal government shores up the program within the next decade.

For this reason, more people are crafting a retirement plan that does not count on Social Security.

Some people picture themselves staying employed indefinitely, either because they enjoy their work or because they can't afford to retire. However, reality often has other plans.

Health issues and even age discrimination can end a career sooner than expected. Instead of assuming work will always be an option, more people are building a retirement plan that will sustain them if work suddenly becomes impossible.

A classic rule states that you can safely withdraw 4% of your retirement savings each year without the risk of running out of money. But today, many feel that market volatility and longer lifespans make withdrawing a fixed percentage too risky.

Instead, more retirees are simply adjusting withdrawals based on their needs and the performance of the market.

An old formula suggests that the best way to decide how much money to put in stocks is to subtract your age from 100.

So, under this formula, a 60-year-old would subtract their age from 100 and decide to invest 40% of their savings in stocks.

However, today, many retirees are maintaining a higher percentage in equities so they can keep growth potential alive.

If you decide to pursue this approach, just remember that the stock market can be a risky place. So, make sure you can weather potential downturns.

The tradition of relocating to a new place during retirement is becoming a little less common.

In 2024, about 258,000 Americans moved to retire, a decline of 23.8% compared to 2023's peak activity, according to Hire A Helper.

Why are fewer retirees moving? Mortgage rates are climbing and housing prices are soaring, making it tougher to both buy and sell homes. Instead of hunting for a perfect retirement destination, many people are deciding to stay put.

More retirees are ditching the idea of a full retirement in favor of semi-retirement, or "encore careers." Instead of stopping work altogether, they're opting for part-time work or focusing on work with a purpose.

Pursuing work you enjoy can help you stay busy, providing a more gradual transition into retirement. It can also help you earn extra income that you can use to increase the size of your nest egg.

Retirement planning looks different from how it did a generation ago. Many once-standard rules, such as fixed savings targets and rigid withdrawal schedules, are being replaced by more flexible, personalized approaches.

As you craft a retirement plan, remember that a one-size-fits-all approach may not make sense. Instead, you might shift your focus toward adaptability and multiple income streams in an attempt to reflect real-world uncertainty.