What Are The Top Retirement Myths And Realities?
Learn About Retirement Myths and Realities
Whether you are near or far away from retirement, learning about any retirement myths and realities that may exist can only help to strengthen your financial future. Personally you may already be able to distinguish between a myth and a reality but it does not hurt to review. Folks hear so much about retirement planning that they sometimes get the myths confused with the realities, unfortunately that happens too late to make any corrections.
#1 – Social Security’s Got You Covered
That is probably the biggest myth out there. The reality is that social security will fall short. Financial experts forecast that you will need approximately 85 – 90% of your pre-retirement income once you retire. Social security will most likely provide you with less than 50% of your pre-retirement income. Your working years are the best time to save up enough money to help fill in the gap left between your financial needs and any social security benefits.
#2 – Medicare’s Got You Covered
Another huge myth. Yes Medicare will pay for your health care expenses during your retirement. But no, it will not pay for 100% of those expenses. Medicare covers less than 50% of your health care expenses. Once you stop working where will you get the money to make up for those uncovered medical expenses?
#3 – Can’t Afford It
Unfortunately many individuals believe that they just cannot afford to save for their retirement. But, if you do not save for retirement during your working years, then when will you? And if you aren’t saving for your own retirement, then who is? If your employer offers a 401k or 403b plan and a match to boot, you must take advantage of those tax-advantaged investments. An employer sponsored retirement plan allows you to invest money on a pre-tax basis. An employer match is free money, can you really afford to turn down free money?
#4 – You’ll Just Work
This can be considered a myth and a reality. Many people are not concerned about saving for retirement because they believe that they will just continue to work during their retirement. That works for most people but what if you are unable to work due to your health? What if you cannot find a job? What if that job doesn’t pay enough to cover your expenses? With so much on the line, why take any chances?
Your working years go by so quickly, you surely don’t want to come to the end of those years empty-handed. Be sure to stay focused on the end result…saving enough during your working years to carry you through your retirement years.