When it comes to managing your money, simple advice is appealing. Save 10%. Pay off all your debt. Take Social Security at 70. But are these “rules of thumb” really helping—or could they be steering you off course?
In Episode 112 of Last Paycheck, Archie and Rob Hoxton dive into the most common financial shortcuts and challenge their usefulness in real-world scenarios.
The Truth Behind 6 Common Rules of Thumb
Let’s walk through the popular rules discussed—and why they may or may not work for your situation.
1. Save 10% of Your Income
This is often the first bit of advice people hear when starting a new job. And for someone just getting started, it’s not bad. But for someone playing catch-up or approaching retirement? 10% likely won’t cut it. You may need 15% or more, especially if you didn’t start saving in your 20s.
Bottom line: A good starting point, but not a long-term strategy.
2. You’ll Need 80% of Your Income in Retirement
Rob and Archie caution that this rule may be outdated. Many retirees end up needing closer to 100%—especially in the early, active years of retirement filled with travel and new experiences. Later, healthcare costs often rise, adding more pressure to retirement budgets.
Bottom line: Don’t underestimate your lifestyle or medical expenses.
3. The 4% Withdrawal Rule
The 4% rule assumes you can withdraw 4% of your portfolio annually (adjusted for inflation) for 30 years without running out of money. But markets fluctuate. Emergencies happen. Needs change.
Bottom line: It’s a guide—not a guarantee. Your plan should adapt to your life.
4. Be Debt-Free Before Retirement
This one feels good—but may not always be the smartest financial move. If you have a 2% mortgage and your investments earn more, paying off that mortgage early could cost you in long-term growth. The key is balance.
Bottom line: Don’t sacrifice future wealth for short-term comfort.
5. Keep 3–6 Months in an Emergency Fund
Archie and Rob agree this is situational. A business owner with unpredictable income may need more than six months saved. A risk-tolerant investor with ample liquidity elsewhere might be fine with less.
Bottom line: Customize your emergency fund to your lifestyle and risks.
6. Delay Social Security Until 70
While waiting can increase your monthly benefit, it’s not always the best move. Health concerns, family longevity, and income needs all play a role. For some, claiming early might be a better fit—even if it’s not “optimal” on paper.
Bottom line: When to claim Social Security should be a personal decision, not a rule.

The Takeaway: Rules Are Just a Starting Point
Financial rules of thumb exist for a reason—they offer simplicity and can be helpful in the absence of a plan. But life isn’t one-size-fits-all, and neither is your money.
If you’ve been relying on quick shortcuts or conventional wisdom, now is the time to upgrade from “general advice” to a personalized plan that reflects your unique life, goals, and risks.