Retirement can be one of the most exciting times in a person’s life providing you’re well prepared for it. With the freedom that comes with no longer having to work can also come the stress of no longer having a steady income. With early planning and awareness about the following retirement myths you can ensure that your golden years are your best years:
Myth #1: Assuming You Can Live on Social Security Alone
No matter how frugal of a lifestyle you think you’ll have in retirement, social security was not designed for you to be able to live only on the monthly payments you receive. Making sure that you have a retirement savings plan is very important to your retirement happiness. It’s never too soon to start saving for retirement.
Myth #2: Medicare Will Take Care of All Your Health Care Costs
Upon reaching the age of 65 you will be enrolled in Medicare which is a national health insurance program which will cover a large amount of your healthcare bills including hospitalizations or visits to the doctor. However, according to most studies, Medicare will probably only cover about half of your health care costs as it doesn’t cover things such as dental, vision, or long-term care. So while it’s nice to know that any major illnesses will be taken care of you will still need to look into supplementary insurance.
Myth #3: That You’ll Retire at 66
It’s nice to be able to think that there’s a golden age for you to be counting down to of when you’ll be able to retire. The reality of life, however, is that you don’t have to wait until you reach the full retirement age to retire and in some situations you might not be able to. It stands a chance that due to health concerns you may have to stop working before you reach your full retirement age, so it’s best to have a contingency plan in case this happens. On the flip side of it, however, if you are able and want to continue working past the age that your social security benefits will start, then when you do retire your social security payout will be higher every month which might help considerably with your bills.
Myth #4: You’ll Spend Less in Retirement
By the time you reach retirement, hopefully you will have planned well enough that you are not entering retirement with debt. This doesn’t mean, however, that you’ll be spending less money as there will probably be a lot you hope to do during your retirement years, especially if you’re wanting to travel. In addition, there will always be the expenses that occur throughout life, such as taxes and maintenance work on your cars or house. Make sure that you’re planning to have at least 80% of your pre-retirement income a year, as you could easily spend this.