Retirement can be an exciting time for many people, but it can also be a time of confusion and anxiety. Retirement plans vary from person to person, and they are continually changing as time progresses. There are many myths about retirement that can scare people into putting it further off. Let’s take a look at some of the various misconceptions people tend to have about retirement.
Firstly, many people are unsure how much they need to or should save up to retire comfortably. The truth is that the number will change for each person, and there is no correct answer. Many people work with an advisor to more accurately figure out a number that works for them based on their current finances and future dreams. Next, some retirees assume that Medicare will cover their health care needs during retirement. However, Medicare does not cover long-term needs such as assisted living, nursing home stays, and in-home care. It is suggested to research various saving methods to ensure that you have the proper funds needed to cover your health care during retirement.
It is common for retirees to believe that they should not expect much from Social Security. Social Security is actually more dependable than many might think. Although it is not enough to cover all of your retirement needs, it can definitely serve as an estimate of what you can expect to be paid throughout retirement. Some may believe they can work as long as they have to. While it is true that you can work as long as your body and lifestyle allow, it can be challenging to find and keep jobs after the age of 65. It is suggested not to have to count on working income past retirement.
Lastly, it is a common myth that you will automatically spend less and pay less in taxes in retirement. Depending on what your goals and plans are for your free time, you might spend more if you decide to travel or purchase a new home. Additionally, you will pay less in taxes during retirement, but you will also have less income. But depending on your previous income, you may remain in the same tax bracket, and tax rates will continue to rise in the future.