Incorrect--and usually too rosy--retirement-planning assumptions are particularly problematic because, by the time a retiree or pre-retiree realizes her plan is in trouble, she may have few ways to correct it; spending less or working longer may be the only viable options.
What follows are some common--and dangerous--assumptions that individuals make when planning for retirement, as well as some steps they can take to avoid them.
Dangerous Assumption 1: That Stock and Bond Market Returns Will Be Rosy
Most retirement calculators ask you to estimate what your portfolio will return over your holding period. It may be tempting to give those numbers an upward nudge to help avoid hard choices like deferring retirement or spending less, but think twice.
