How much do you know about retirement? If you’ve fallen for any of the common misconceptions floating around, it might be less than you think. Get the skinny on these retirement myths now, or they could come back to haunt you in your golden years.
- Myth #1: Medicare will cover long-term care. This myth is probably based on wishful thinking. Although Medicare does cover care in a long-term care hospital or skilled nursing facility along with other types on ongoing medical care, it does not cover long-term custodial care.
- Myth #2: Medicare will cover dental, vision and hearing issues. Original Medicare does not include dental, vision and hearing coverage, but many Medicare Advantage policies do. Don’t assume you have coverage.
- Myth #3: You’ll be able to maintain your lifestyle on a fixed income. Let’s say you can comfortably get by on $2,000 a month at the start of your retirement. Does that mean you can budget $2,000 a month for the rest of your life and maintain the same lifestyle? Nope. You’ll need more money to keep up with inflation.
- Myth #4: Your expenses will be low. Paying off your mortgage can help, but if you own your home, you’ll need to pay for repairs and taxes. Medical bills can negate any savings you see from having paid off your debts.
- Myth #5: You’ll get by on Social Security alone. In June 2017, the average retirement benefit was only $1,369.
- Myth #6: You won’t work. That’s the whole point of retirement, right? Wrong. Whether it’s because people need more income or simply want the fulfillment that a job can provide, the Bureau of Labor Statistics has found that more and more people of retirement age are staying in the workforce.
- Myth #7: You’ll retire when you’re ready. Unfortunately, some people are forced to retire early. This can happen when they have to leave work to take care of ailing relatives or to deal with their own health problems. Being laid off is another possibility.
- Myth #8: You can predict how long your retirement will last. This would require predicting your own death. The downside of longer life spans is the risk of outliving one’s retirement savings.
- Myth #9: Life insurance can’t help you while you’re alive. Many life insurance policies include living benefit riders that allow payouts if the policyholder is diagnosed with certain illnesses. Some life insurance policies also build cash value that can be tapped. Both these facts make life insurance a valuable tool in retirement planning.
- Myth #10: You can’t think about retirement yet. Although credit card bills and student loan debt may complicate the issue, you don’t want to ignore your retirement planning.
Whether you are 25 or 65, PTT Financial can help you with every item on this list. Download our Financial Planning Overview and Needs Analysis here.
