There’s a lot of misinformation out there about retirement, and many of these myths can lead people astray. Understanding the facts can help you plan better for your future and avoid unnecessary worries, but what are some of the most common misconceptions? Well, in this article, we’ll dive into a list of widespread retirement myths that simply aren’t true.
According to Bankrate, “While not everyone needs a financial advisor, many people would benefit from personalized advice to help them build a strong financial future.” Some people think that saving for retirement is simple, but getting advice will make sure you’re saving enough to be comfortable in the future but not so much that you’re uncomfortable now.
Your Children Will Support You
Some people are not concerned about saving for their retirement, as they are relying on their children to support them financially in their old age. But your children might not be in a financial position where they can support you and it’s not fair to put this burden on them.
You’re Saving Too Soon
Some people believe that they don’t need to begin saving for retirement until they are in their 30s. But in reality, it is never too early to begin saving. The earlier you start saving, the higher your chances of being able to enjoy a comfortable retirement.
You Will Be Rich
Retirement doesn’t mean having a lot of money. “Against the backdrop of rising inflation, (people) struggle with higher costs related to housing, utilities, groceries, and health care… even for older adults who are making ends meet, a single health or other emergency can quickly tip the financial scales,” says the National Council on Aging.
Personal Savings Will Suffice
It’s commonly believed that personal savings will be enough for you to enjoy a good retirement. But in reality, you will need other sources of income if you want to retire comfortably. A good pension and investments that will give you a monthly allowance will be of great help.
You Can Rely On Your Employment Plan
Many people are relying entirely on their employer’s pension plan to get them through their retirement. But this may not give you enough funds to continue your current standard of living. Aside from your employment retirement plan, you need to have some of your own savings to fall back on.
Travel Will Be Cheaper
When you retire, you will be able to travel off-peak and save money. But this doesn’t mean travel will be cheaper, as you’ll spend more on insurance. According to Forbes, “If you’re a senior planning a trip, you’ll need to budget, on average, an additional 8% to 18% of your trip cost to cover a senior travel insurance policy.”
Hobbies Will Be Cheaper
There will be a lot of senior discounts for you to take advantage of when you get to retirement age. Some hobbies will be free, and others will come to you at discounted prices. But this doesn’t mean you’ll spend less on hobbies than you do now, as you’ll have more time to participate in them.
You Will Spend Less
Some people think they won’t need a lot of money to retire because they will spend less. But this isn’t necessarily true. Healthcare costs skyrocket when we get into retirement. Also, the cost of traveling to and from healthcare checkups and appointments must be factored in.
You Can Catch Up On Saving
Saving for retirement is expensive, and once you put it off, it’s very difficult to make up for lost time. Some people think that they can catch up on a couple of years of savings when they pause their retirement plan, but this is a lot easier said than done.
You Won’t Worry About Taxes
Some people believe that they won’t have to worry about taxes when they get older and begin retirement. But this isn’t true. If you receive a lot of income from your pensions and withdraw a lot of money from your retirement accounts, you’ll be heavily taxed.
You Can Spend Your Retirement Fund Now
Some people forget that although a retirement fund is full of money for you to spend, it’s not available for you to use until you reach retirement age. In fact, some traditional pension plans and ISAs will make you pay a fine if you want to spend some of the funds before you reach a certain age.
You Have Plenty of Time to Save
When we’re young, we often feel like saving for our retirement is not a priority and that we have plenty of time to begin saving. But health issues can appear suddenly and prevent us from being able to save as much as we’d like.
Your Partner Will Support You
Relying solely on your partner for support during retirement isn’t a wise decision. The figures from Everyday Health show that “more than one in three people who divorce are older than 50.” You and your partner may not always be together to support one another.
Your Job Will Always Fund You
Some people put all of their eggs in one basket and trust that their jobs will completely fund their retirement. But it isn’t good to rely just on your job as a way of saving for retirement. You could lose your job or have to stop working because of care responsibilities.