Financial advisors need to be aware that many rules of thumb can be downright harmful when blindly followed as a fail-safe strategy. They can be unhelpful in financial planning, and with Social Security claiming strategies in particular.

A popular example involves the use of a person’s age to determine their asset allocation. If they’re 25 and starting out in a career, conventional wisdom dictates they allocate 25% of their portfolio to conservative bonds and 75% to higher-risk equities, and slowly adjust the ratio to a more conservative bent as they grow closer to retirement. Overly simplistic? Absolutely, but at least there’s time to fix mistakes.

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