Broker Check
The Role of Luck in Retirement Planning: Separating Myths from Realities

The Role of Luck in Retirement Planning: Separating Myths from Realities

May 09, 2024

What is luck? Most dictionaries define it more or less as something good or bad that happens to you, by chance or otherwise, that you find, or don’t find, desirable.

We typically associate luck with happiness, gratitude, and a sense of optimism. But you have good luck, and then there is bad luck. How luck is defined is closely tied to a person’s expectations and what they desire. Legendary investor Charlie Munger once said, “The first rule of a happy life is low expectations.”

If it is all about mindset, how is luck involved? Some might argue Munger’s perspective is an exaggeration. Others might quip that it means little, coming from a 99-year-old billionaire. However, history has shown this might not be just whimsical fluff.

In 2014, Forbes published an article detailing the epic collapse of the Vanderbilt dynasty over generations. In 1899, the business founder, Cornelius Vanderbilt, died, and his son William inherited the family’s 87% stake in the company. At his death, his two sons inherited the company. One of them, William Kissam Vanderbilt reportedly stated: “Inherited wealth is a real handicap to happiness… It has left me with nothing to hope for, with nothing definite to seek or strive for.” For him, having plenty of money to retire seemed like a whole lot of bad luck.

At what point would you feel luck has shined down upon you? Here are four myths involving luck that we’d like to separate from your retirement reality:

Myth #1

You are lucky to be rich in retirement, which will make you happy.


As you can see from the above story, being rich is not directly associated with happiness or good luck. In fact, there so many stories that contradict that perception. The average person struggling to pay bills or wishing they could afford to travel more might imagine a life flush with cash as a lucky break. There are hundreds, if not thousands, of stories that state otherwise. The reality is that good luck and happiness in retirement is having enough, not necessarily having more.

Myth #2

If I get lucky in the stock market, I will be set for retirement.


Luck plays almost no role in gains or losses in the stock market and, therefore, a comfortable retirement. Getting lucky in the stock market is possible, but it is rare. It is so rare that, according to the University of California at Berkley, over 90% of people who invest lose money over time. It isn’t a mystery why this occurs. There have been many recessions and bear and bull markets over the years.

Through it all, according to, the S&P 500 has produced, on average, a return of about 10% per year. But noticeable gains may be had over decades, not days. Yet, it seems human nature continues to look for and expect the quick payday which often leads to losses. In this context, luck equals patience and a careful, risk-tolerant investment strategy with an emphasis on patience.

Myth #3

If I were luckier in life, I could retire on time.


There are circumstances where bad luck occurs, and maybe somebody loses everything. Still, generally speaking, the role of luck in retirement planning comes from being honest with yourself, planning, creating a strategy, and working toward smaller goals to see the bigger picture. The word luck is often used in conjunction with making excuses or a lack of accountability.

It is a harsh truth but owning up to it can help you move toward a more productive future. There are always going to be risks, and ups and downs. However, you can help mitigate challenges through retirement planning and preparation.

Myth #4

Having enough for retirement will be a matter of luck.


Don’t leave your retirement savings and security up to luck. Instead, create your own luck with preparedness, planning, and help from a financial professional. A solid retirement strategy is crucial, and you may need guidance on managing your accounts, forecasting, and making decisions which could impact your financial future. Nothing is for certain, and there is no way to predict the future concretely. However, getting the guidance you need may help you avoid unforeseen obstacles, stress, and bad luck down the road.


Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.


My final lesson from Charlie Munger – the upside of low expectations in business, geopolitics and life: Adam Philipp -

The Vanderbilts: How American Royalty Lost Their Crown Jewels (

hhn046.dvi (

Luck Definition & Meaning - Merriam-Webster

(03/10/23) Why 90% Of Traders Lose Money (

LUCK | definition in the Cambridge English Dictionary

S&P 500 Average Return and Historical Performance (

This article was prepared by LPL Marketing Solutions

LPL Tracking # 553583