The Three Biggest Retirement Planning Myths

Written by , October 29, 2014

The Three Biggest Retirement Planning MythsThere is plenty of good information about retirement out there to help you identify your priorities, set realistic goals for yourself, and come up with a plan for achieving those goals. It can take a bit of time to research in order to find those resources, but rest assured that you’re not alone when planning for retirement.

Unfortunately, there is also a lot of unhelpful or even harmful information out there as well. This misinformation about retirement can cause you great setbacks on your path to retirement, and make it harder for you to reach your goals.

Here are three of the biggest retirement myths you need to guard against.

  • I’ll Just Live Off of Social Security. Depending on your other resources, income from the Social Security retirement benefits program may represent an important part of your retirement budget. But for most people, Social Security will only be able to cover a portion (and perhaps just a small portion) of their monthly expenses during retirement.
    • There can also be a bit of a disconnect between how people claim they view Social Security, and how they’re actually doing their retirement planning. Most everyone will claim that they’re no longer relying on the Social Security program, but their saving habits certainly seem to suggest that they’re hoping that they’ll be significant funds from the program available for them once they reach retirement age.
  • I Don’t Need to Worry About Health Insurance Costs. The Federal Medicare program has certainly done a lot to try to provide health care services to senior citizens. But some parts of Medicare coverage are only available at an additional cost. And not every type of disease, illness or injury will be covered by Medicare.
    • Most retirees will still want or need to have some type of additional coverage for their health care. A leading brokerage recently calculated that a 65-year couple retiring today can, on average, expect to pay well over $200,000 on their health care. You might pay less, of course, but the point is still a good one; you can’t rely on Medicare to cover all your health care expenses during retirement.
  • I’ll Just Downsize. Downsizing your lifestyle – moving to a smaller home or to a less expensive area of the country – can be an important component of an effective retirement strategy. You certainly have various options for downsizing, but you might not have as many choices or as much freedom as you might think.
    • For example, your plans to move to another part of the country may be derailed by personal factors, or an increase in prices in that location. Or you might be unable to sell your home at the price you’re looking for, or perhaps your children need to move back home to live.

    By avoiding retirement myths and other types of bad information, you’ll have the best chance of reaching your long term retirement goals.

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