Helping people plan to retire successfully is the most important work we do every day. Today, we want to share the truth about the 7 retirement myths we commonly hear.
1. “I will live off Social Security.”
Social Security was specially designed during difficult economic times in the 1930s as a supplement for people who were in trouble. The program wasn’t created to be a plan for retirement, and planning to only live off social security will only lead to social insecurity.
While understanding when to take Social Security is important, it’s only one piece of any solid retirement plan.
2. “Investing up to my company’s 401K match will be enough to retire.”
If you’re making $50,000 a year and your employer is matching 3% a year, you are saving $1,500 a year for retirement. Unless you start saving really really early, plan to work a long time, and don’t plan on spending much in retirement, this isn’t enough for a retirement strategy.
To be able to retire well, we all need to be saving more than the company match.
3. “I will work through retirement.”
When we are 50 or 55 years old, it can be easy to think that we could work for the foreseeable future but suddenly by 60 or 65 things can be different. What if you are not healthy enough to continue working as you had planned?
The statistics tell us that if you are 65 or older, you have a 70% chance of needing long-term care at some point during your lifetime. Again, this is not the best strategy for retirement.
4. “Medicare will cover my medical expenses.”
While Medicare does cover a lot of expenses, there can be surprises. Overall, Medicare coverage can be a confusing topic to understand and navigate. That’s why we have a dedicated Medicare specialist in our office to help people find the best supplement coverage at the best price. Health and wealth go together and health care coverage is always a critical part of proper retirement planning.
5. “It’s too late to save for my retirement.”
If this is your attitude, what is your alternative? Whether you are 30, 40, or 50, starting to save today and never quitting is the best strategy.
I have said it before but if you save nothing, you will have nothing.
6. “I know just what retirement is going to be like.”
In nearly 40 years of walking with people through retirement, I have discovered that retirement years look different than many people expect. The average retiree has an 18-month bucket list which may include activities like cleaning out the garage, taking a trip to Europe, completing the honey-do list, playing with the grandkids, and golfing.
After this first year and a half, it’s easy to see whether a person likes retirement. I have found that about half of people love it and wish they would have done it sooner. Then there is the other half of people who don’t like it and wish they would have kept working in some capacity.
We know that it’s important to plan for retirement income, but many people miss how critical it is to plan for passion and purpose during retirement years.
7. “I can do all of my financial planning, investing, and retirement planning on my own.”
This is the biggest mistake that I see people make. Put simply, the average person doesn’t know the available investment tools, tax laws, or retirement vehicles. Planning for retirement is what we do every day. If you need major surgery, do you go to a trained doctor who has done it hundreds of times or do you do it yourself?
Hopefully, it’s easy to see how these common myths are just that—myths, and the better ways to successfully plan for retirement.
Our team has the privilege of helping people just like you every day, and the best time to start planning for retirement is today. Call us at 970.622.2366 or email us at I[email protected] to schedule a complementary review.