Did you know that the National Institute on Retirement Security estimates that “Americans are at least $6.8 trillion short of what we need to fund comfortable retirements “? This is particularly true for Baby boomers. Every day, 10,000 Baby Boomers retire with a media of $120,000 saved—hardly enough to last for what will be a more than 30-year retirement.
The biggest obstacle to being prepared for retirement isn’t actually money; it’s misinformation. Here are the top 3 myths that prevent people from being properly prepared for retirement.
Myth 1: Retirement means the end of investing
Retirement does not mean that you have to stop investing. Your retirement can last up to 30 years, meaning that you have that many more years to enjoy the fruits of investing. Conversely, a long retirement means your money will be subject to inflation, making the need to keep investing even more essential.
Myth 2: Taxes decrease when you retire
While you may be earning less in retirement (and thus be in a lower tax bracket), you may also lose certain deductions and exemptions that you receive because of your employment. In addition, state and local taxes will rise. These factors mean that you may actually pay a larger percentage of your income in taxes.
Myth 3: I won’t need as much day-to-day living money when I retire
While there certainly will be opportunities for you to decrease your daily cost of living, retirement may mean increased opportunities to travel or the chance to take on a new costly hobby. If you underestimate your financial needs, your retirement planning will be incorrect.
These are just a few of the many myths about retirement that many people believe are true. Others include that you should make your savings priority paying for your child’s education or that Social Security and/or Medicare will be enough for your retirement years.
Why not plan for this important part of your life using facts? At Robin Weingast & Associates, we can help you plan based on retirement reality, not retirement myths. Contact us today to find out how to make your retirement plan work for you.