Planning your retirement can be confusing. Unless you are actually retired, you really can’t appreciate what it is like. A lot of myths have sprung up about retirement and retirement planning and we will take a look at some of them in this article.
A common myth is that retirement will last for 10 – 20 years. In truth, people are living much longer than previous generations. Not only that but the retired population is more healthy and active. Plus if you retire early which is an increasingly popular trend, then your retirement will be longer than normal. To be on the safe side, it is best to plan for a retirement that will last for 30 years.
Another myth, and one that could hurt your pocketbook, is that living expenses are lower after you retire. In most cases, this is not true. You may still be paying off a mortgage, taking care of your children, grandchildren, or parents. There may be others in your family who will be depending on your income for long after you retire. So it is a good idea to figure your expenses to remain the same and not count on them going down when your retire.
Social security is another topic of confusion and myths abound. Many people believe that social security will be defunct by the time they retire and others believe they will be able to live off of social security alone. Only time will tell if social security will survive through the years, but one thing is almost certain. If you do receive social security benefits, they will amount to much less than your current income.
More myths exist on the subject of taxes. You will still have to pay taxes after you retire, even if you live off retirement and social security as long as your income exceeds the limit. If you planned your financial future well, it is possible you will encounter increased taxes after you retire. If your taxes are lower or zero then, then it will be because your income be quite low. So it is best to plan taxes into your retirement planning and know that you will have to pay them long into your retirement.
Any of the myths above can harm you if you believe in them and don’t do your research and learn the truth about planning for retirement. The best thing to do is consult with a financial planner who can guide you through all the technicalities of taxes and savings so you know your retirement plan is on the right track.