Your retirement will be unique to you, but it often helps to have some rules of thumb as a guideline.

Over time it may make sense to revisit those rules. For example, experts used to talk about retirement being based on a three-legged stool: a pension, Social Security and personal savings. Such a scenario isn’t applicable for most people these days, or at least not those working for a private-sector company.

Fewer employees have pensions that guarantee lifetime monthly payouts. There’s a lot of uncertainty about the financial stability of Social Security. This means some of the advice that worked in years past won’t apply to future retirees.

And now with the coronavirus pandemic throwing tens of millions of Americans out of work and causing extraordinary stock market volatility, it’s time to give a makeover to some retirement rules of thumb.

Old rule: Make retirement savings your No. 1 priority.

New rule: Make paying off debt, especially high-interest debt, a priority.

The longer you wait to get rid of debt, the more likely it will hinder your retirement savings goal. You’ll find that so much of your income is devoted to paying interest on your debts that you feel you can’t afford to save. This makes paying off debt just as important as saving for retirement.

If you’ve got high-interest credit card debt, you need to make it a priority to get out from under this liability. Student loans dragged out over several decades can grow and become burdensome to your budget.

The longer you have until retirement, the more you should focus on paying down debt. If you’re looking at retiring at 65, and you’re in your 20s, 30s, and even 40s, you can afford to slow down saving for retirement to get rid of liabilities, especially if it’s high-interest debt.

There’s at least one caveat to this rule of thumb.

If your employer offers to match your retirement savings up to a designated percentage, try to save enough to contribute enough to receive the match, said Marguerita Cheng, a certified financial planner (CFP) based in Gaithersburg, Md.

“I think balance is important,” Cheng says.

The most popular match formula among companies which have a 401(k) is a 100 percent match up to the first 3 percent that the employee contributes; then 50 percent match for the next 2 percent contributed, according to Fidelity Investments, one of the country’s largest administrators of workplace retirement accounts. About 40 percent of 401(k) plans use this formula, according to Fidelity.

“I advise clients to hate debt with a passion and I have advised several clients to cease 401(k) contributions beyond the match so they can aggressively pay down their debt,” said Ernest Burley, a CFP based in Maryland.

Working with a financial planner or a budget counselor from a nonprofit consumer credit counseling agency can help you develop a plan to pay down the debt so you can get back to saving for retirement as soon as possible.

Once the debt is gone, you can contribute substantially more to your workplace retirement account or an IRA. Time is still on your side.

“I like to strategically manage that situation so I am not a proponent of tossing all accumulated savings onto the debt, leaving the coffers bare,” Burley said. “That is not a safe position to be in. I always let clients know this is short-term pain to reap long-term rewards. A timeline is another ray of hope I like to give. We look at all the debt then I give an aggressive recommendation to pay off the debt by a certain date so they know they’ll be back on track after that date.”

For instance, Burley says he might recommend taking $500 a month to pay off $6,000 in debt, then revisit the situation after the debt has been paid off to reassess the financial picture and plan the next steps such as allocating funds to build up savings and retirement accounts.

Debt vs. retirement: Here’s how to choose where to put your money.

Here’s why you should make paying off your student loans a priority over saving for retirement

Old rule: Your home is a great retirement investment.

New rule: Your home is not a great retirement plan.

Your home is an asset but it is illiquid, meaning you can’t quickly access the equity should you need cash. Yet, for most Americans, their home is their biggest asset.

“Just like the stock market, real estate returns vary widely,” said Carolyn McClanahan, a physician turned certified financial planner who founded the fee-only Life Planning Partners based in Jacksonville, Fla.

“We may have years of real estate growth and then significant pullbacks and long term recessions in the real estate market,” McClanahan said. “When you need money, you will be hurt if you have to sell your home in a down market. And unlike stocks, your home is not very liquid, so it may take years to sell.”

Or, if you are forced to price your home to sell, you could take a significant loss.

“This is another rule that should have never been taught,” Burley said. “Owning a home is very, very important but it is not a retirement investment. Ask those who suffered losses on their properties from 2008 to 2009 and are still underwater or at break-even while the stock market has quadrupled in value since that crash. Your home is just that, a home. It is an ‘illiquid asset.’ You can't cash in your front door or some shingles off your roof if you need money from your house.”

There is one way to tap the cash in your home. If seniors have substantial equity in their homes, they can take out a reverse mortgage.

Unlike a traditional mortgage, with this loan product, you don’t have to make monthly payments. With a reverse mortgage, borrowers don’t pay back their loans until they move, sell or die. Once the home is sold, any equity that remains after the loan is repaid is distributed to the person’s estate.

To qualify for a reverse mortgage, you have to be 62 or older. You have to have paid off your mortgage or paid down a considerable amount so you have equity to tap. Your home must be your principal residence. Most importantly, borrowers have to maintain the home and pay property taxes and homeowner’s insurance.

Many consumer advocates warn about the downside of using a reverse mortgage as a source of retirement funds. If someone is using the money from a reverse mortgage to cover a significant shortfall in monthly expenses, they may quickly exhaust this source of funds. There are pros and cons to a reverse mortgage. Despite commercials touting just the advantages, the complexity and cost of this financial product call for an abundance of caution. Don’t overlook the disadvantages.

Old rule: You’ll only need between 70 percent and 80 percent of your preretirement income.

New rule: You may need to replace 100 percent of your preretirement income.

Don’t underestimate your retirement spending.

“People think their expenses will go down during retirement because they don’t commute to work and do myriad other things associated with that period of time,” Burley said. “But other expenses often take the place of the supposed savings from retiring. Many people still have a mortgage going into retirement, home and vehicle upkeep, giving to or spending money on grandchildren and possibly other relatives. It is better to plan for 100 percent of what you were living on before retirement. This is the more conservative approach. It won’t hurt to have more saved than needed, but it’s a pickle the other way around.”

Retirement has three phases — the go-go years, the slow-go years and the no-go years, says McClanahan.

“During early retirement, many people spend as much if not more than what they were spending preretirement doing all the travel and making transitions they didn’t have the time for preretirement,” she said.

The spread of covid-19 has grounded many travel plans of course but eventually, things will return to normal. In fact, there may be a lot of demand to getaway.

“In the slow-go years, as they get bored with travel and settle down, spending decreases," McClanahan said. "In the no-go years, health care costs can skyrocket, and they need to be prepared for their expenses.”

It’s hard to calculate with precision all your retirement expenses, and it’s possible you will be able to greatly reduce your monthly expenses. But it’s better to overestimate than underestimate your living costs.

Retirement planning is a guessing game. Guess wrong, and you could lose a lot.

Old rule: Retirees should greatly reduce their exposure to stocks.

New rule: Retirees shouldn’t shun stocks.

One of the greatest financial risks for retirees is inflation.

“While many people are rightfully aware of investment risk, inflation risk is a commonly overlooked issue,” said Eric Bronnenkant, head of tax at online financial adviser Betterment. “The cost of goods and services, especially medical in retirement, will likely exceed the growth of conservative investments. It is important to find a portfolio risk level to be comfortable with that balance these risks.”

Ask yourself: How will my investments be impacted by inflation?

“It’s not unusual to spend 30 plus years in retirement,” Cheng points out. “Some exposure to equities can help keep up with inflation.”

Without knowing when you’ll die, you have to hedge that you’ll live a long life. About one out of every three 65-year-olds today will live past age 90, and about one out of seven will live past age 95, according to the Social Security Administration.

“Generally, the older you become the less equities you have because you want to reduce the risk of losing your money at a time when you need it,” said Douglas Boneparth, a CFP based in New York. “Bonds are less risky than stocks. But for those who have plenty of money for retirement, equities may help grow their wealth even further because they have more room to take on risk. They can afford any potential losses. On the flip side, those with underfunded retirement accounts might need to lean on stocks to generate greater returns necessary to sustain their lifestyle, but again that implies taking on greater risk.”

Having 100 percent bonds and no stocks in the long term actually performs worse than adding just a small slice of stocks, McClanahan said, adding that 10 percent in stocks can make a difference.

“Make sure to use broad-based low-cost funds to fill that stock allocation,” she said. “In general, people need to understand how much they can afford to lose. If you have a small nest egg and can’t afford to lose much, stick with 10 percent to 30 percent stocks. If you can weather longer downturns, you may want to increase that percentage to 30 percent to 50 percent. If you have more than enough money and want to grow that money for your family in the future, you can become even more aggressive. Of course, if the market does well, your family will be happy. If the market doesn’t do well, you won’t leave them as much but you should still be okay.

Old rule: Save at least 10 percent of your income for retirement

New rule: Aim to save 15 percent of your income for retirement.

One factor contributing to an increase in workers reaching millionaire status in their 401(k) is by saving a high percentage of their annual pay. They contribute at least 15 percent to their workplace retirement plan, according to Fidelity. Workers often reach this percentage through a combination of their contributions and the matching contribution from their employer.

Why 15 percent you may wonder?

This percentage benchmark takes into account evolving market conditions and provides a savings cushion for people who may want to retire early, or who won’t see a huge decrease in their spending, said Eliza Badeau, director of Workplace Thought Leadership at Fidelity.

With the cost of housing, transportation, food, and other expenses you may be living paycheck to paycheck. The economic hit you may have taken because of the coronavirus may make it hard to fathom you could ever get to the point of saving 15 percent of your income. Still, as you recover financially, try to push as close as you can to it.

If you aren’t saving anything in your workplace plan, start at 1 percent or 2 percent, increasing every year until you can afford to hit the 15 percent goal.

“We realized that not everybody has the ability to start there,” Badeau said. “And I can imagine some people, early on in their career, who might see that number and get a little scared. But we do like to remind people that the percentage includes any company match. The most important thing to do is just start saving as early as possible and take advantage of that whole match. Increase as you can, because those incremental increases over 30, 40 years adds up to be a lot of saving.”

Badeau said nearly 27 percent of millennials in plans managed by Fidelity are hitting that 15 percent mark, in a combination of their contributions plus their company match.

Some younger workers may be in a better position to save a significant part of their income because they don’t have competing financial obligations such as student loans, credit card debt or mortgages, Badeau said.

Of course, there are exceptions to every rule so consider your individual situation. Do what works for you. But at least be sure you are intentional and realistic about the projected retirement income you’ll need.

Just consider this. A secure retirement doesn’t happen by accident. Without rules, you risk not having a secure retirement.

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