Retirement: AARP - Retire these retirement rules

  • 31st Mar 2025
  • 2 min read

My phone and "the algorithm" pointed me to this article recently. I've "printed to pdf" and linked that file in case the URL goes stale. I thought it was pretty good.

https://www.aarp.org/money/retirement/retiring-these-retirement-rules.html

Retire-these-retirement-rules-20250331.pdf

Looking back over my mental shift to retirement, most of these rules of thumb came up. They're good for simple Excel sheet math, but as I discovered, everyone's situation and plan is different.

The "rule" in the article I tend to harp about most is the "contribute to your 401k pre-tax, and pay taxes later when your income is lower." Today I would be shoveling my money into a Roth IRA and/or Roth 401k, post-tax. I say this because:

  1. Taxes become a more important subject when you retire. You pay your taxes during your working years without too much thought, but you look at taxes differently after retirement.

  2. I never once looked at my tax savings each working year because of pre-tax 401k contributions. I'm not saying that strategy didn't reduce my taxes, but I never tried to measure it.

  3. If you have $1,000,000 is your 401k when you retire, you actually have about $750,000, and the IRS has $250,000.

  4. Where do you think taxes are headed in the future? Lower or higher? If it's higher, the Roth option is even more attractive.