5 Retirement Myths Debunked and Dispelled
When looking at your retirement accounts, it’s easy to think everything’s A-OK. It’s easy to think your retirement savings and Social Security income will cover your living costs. After all, it’ll cost a lot less, right? Aren’t your retirement years basically just a long string of Saturdays?
Believing it’ll be less expensive is one of the biggest retirement myths.
If you’re nearing your golden years, then, it’s crucial that you plan accordingly. Relying solely on Social Security benefits and a limited 401k leaves you vulnerable. Unexpected expenses, health issues, and reduced purchasing power can drain your nest egg.
And, if you’re just now starting to think about retirement, you need to be aware of the myths and grow your retirement savings to ensure a well-funded future.
Will Your Retirement Savings Last?
People assume that their retirement income will be sufficient to sustain their lifestyle. Retirement finances are wildly different, though, as you’re likely to have different financial needs, plans, and spending habits. So, to ensure you’re ready, let’s look at a few myths about retirement.
‘I Can’t Afford to Save for Retirement’
A recent study revealed that more than half of all Americans have no retirement plan. But, with rising costs, medical expenses, and inflation, the truth is simple: you can’t afford to not save for retirement. If you’re assuming Social Security and Medicare will cover the majority of expenses, you’re in for a rude awakening.
‘If the Market’s Down, I Should Decrease Contributions’
Many people falsely believe that they should decrease their 401k contributions when the market drops. Or, worse yet, that they should pull their money out to avoid loss. But, really, the opposite is true. In fact, one of the best times to increase your contributions is when the market is down.
‘My Bond Percentage Should Equal My Age’
Financial planning is way, way too complex to be distilled into overly simplistic ‘advice.’ There’s just too many variables for this advice to account for future retirees in every tax bracket, at every age, and at every level of wealth.
For example, if your personal savings are below average, you may benefit from bonds and other safer investments. But, if your savings are way above average, you should allocate your assets much differently.
‘I’ll Spend Less Money’
Earlier, we mentioned that your retirement is just a long string of Saturdays. If you think about it, that’s kind of terrifying. Saturday is the most expensive day of the week! It’s the day you go out to eat, have a few cocktails, take a short trip, or go to the movies.
So, yes, you should begin saving under the assumption that every day will be Saturday. In all likelihood, your retirement benefits will not cover that level of expenditure. And, once you reach retirement age, if you don’t have enough set aside, you could find yourself living like every day is Monday.
‘I Don’t Need a Financial Advisor’
Most people don’t fix their own cars, replace their own furnaces, or perform their own surgeries. So, for your own financial security, it’s best to trust an advisor with your investments. Since they have worked with countless others in similar situations, they’re much better equipped to ensure you – and your family – enjoy a well-funded, secure retirement.
Get Help With Your Retirement Plan
If you need help dispelling financial myths and setting a retirement budget, Wiser Financial Group is here to help. With years of experience and a team of dedicated professionals at your disposal, we can work with you to plan for health care costs, manage your 401k, and develop long-term tax strategies.
Are you ready to get started?
If you’re eager to begin your financial journey, the team at Wiser Financial group is here to help.
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