In OneLaw’s December newsletter, featured professional Financial Advisor Michael Wands debunks common financial myths.

Read the full December 2025 newsletter HERE.

A text version is below.

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Happy Holidays from OneLaw to you and your family!

This month we feature an article from Financial Advisor Michael Wands about debunking common financial myths.

As always, OneLaw is dedicated to serving the personal legal needs of families and individuals across a variety of practice areas. Let us know how we can help you.

Visit our website (https://www.one-law.us) or give us a call at 617-831-4355.

Peter A. Hahn, Esq. Principal Attorney

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Debunking Common Financial Myths

by Michael Wands, CFA (Featured Professional)

One of the biggest issues that many individuals and families struggle with when it comes to their personal financial planning is they get bad advice – often unsolicited – when it comes to making decisions. These can often come from trusted family members, friends or co-workers, from articles that they hear or read in the media or from videos or advertisements that they watch on TV or social media. Often, the source of this misinformation does not have the proper training or credentials to provide what can often be important advice. Sadly, we also hear from many individuals who get poor advice from professionals who do have both the training and/or the credentials to provide advice on financial planning matters but rely on outdated rules of thumb which they pass on to others. The goal here is to debunk a few of these myths.

Myth #1 – The rate of return on my assets is more important than how much I save.

This is probably the most common financial planning myth that we hear, and it’s often driven by certain financial advisors who are trying to market their prowess at being able to “beat the market”. The reality is that it’s very difficult for even the savviest financial professionals to outperform their benchmarks consistently over long periods of time. Seeking outsized returns also can have the downside of encouraging investors to take on more risk than might be appropriate for them to meet their financial goals. Analysis can be used to show that over longer periods of time when people are saving money for retirement (i.e. 30+ years), incrementally increasing one’s savings rate by 1-2% has a greater impact on increasing one’s net worth than incrementally increasing one’s investment return by 1-2%. Also, it’s equally important to remember that one of these things is within one’s control (saving more) while the other is completely outside of one’s control and at the whim of the financia l markets (increasing one’s rate of return).

Myth #2 – It always makes sense to “max out” my 401K contribution.

This is another common myth that is shared amongst working professionals. Because 401K contributions are deducted from one’s paycheck pre-tax, the common thought is that one should maximize this opportunity. 401K plans come with many positive benefits and should be considered as part of an overall financial plan. Contributions are taken out pre-tax and grow tax-free, plus many companies often match a certain portion of employees’ contributions up to a capped amount. We would agree that employees should take advantage of these benefits if they can, up to the amount that the company is willing to match. Over this amount, individuals might want to consider other strategies as a compliment or alternative to a 401K, such as individual investment accounts, Roth IRAs, permanent life insurance or annuities, each which can have additional benefits. And as a reminder, while the money that goes into one’s 401K is deducted from one’s salary pre-tax and will grow tax-free, when that money is withdrawn after retirement, the participant will have to pay taxes on it at that point. Which leads to the final myth…

Myth #3 – I will be in a lower tax bracket when I retire.

Much like the fact that we have no control over the returns that the markets will provide us with, we also have no control over where tax rates will be in the future. And despite the general feeling that tax rates are high today relative to where they’ve been historically, over the long-term (since the 1930s) both the highest and lowest marginal tax rates today are lower where they have been on average. Plus, the perception that one’s tax rate will be lower in retirement than today also implies that they will be earning less income in retirement, which may or may not actually be true.

Hopefully this clears up some common misconceptions about financial planning.

As always, I recommend that individuals reach out to a financial professional when seeking advice about their personal financial planning matters.

Michael Wands is a Financial Advisor with The Bulfinch Group in Needham.

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. The Bulfinch Group is not an affiliate or subsidiary of PAS or Guardian. Life insurance offered through The Bulfinch Group Insurance Agency, LLC, an affiliate of The Bulfinch Group, LLC. The Bulfinch Group, LLC is not licensed to sell insurance. 8650378.1 Exp 12/27.

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