Whether you are just starting your career or you have been in the workforce for years, you might have some misconceptions about retirement. There is not a magic formula or an exact way to plan for retirement. But there are some very bad decisions you can make along the way to this important destination. A major mistake can become a crisis in terms of retirement. Make better decisions by being aware of the risks and debunking some of the myths.
4 RETIREMENT MYTHS DEBUNKED
MYTH#1: YOU HAVE PLENTY OF TIME TO SAVE FOR RETIREMENT.
Retirement might seem far off with the thought that you could easily postpone learning, planning, and saving for it. In fact, the very question of what is easiest is wrong. It’s always easy to procrastinate. Instead, ask yourself what is the best way to secure your retirement. A secure retirement requires you to begin saving as soon as possible. Now is the best time to develop the habit and start to compound your money so it grows to the it’s full potential. Since retirement accounts can grow exponentially over time, the earlier you begin the habit of saving for your retirement the more growth potential your money has to meet this future need.
MYTH #2: IT IS THE BEGINNING OF THE END.
Historically, retirement came at a time when people only had a few years left to live. You could expect to work hard and have those last years to be taken care of. Today’s vision of retirement has changed significantly. First, there is the concept of not waiting to be happy. Enjoy life and take care of yourself. Second, understand that the attitude you have now will likely be the same attitude you have in retirement. That attitude, along with a healthy lifestyle, is helping people live longer, more fulfilling lives. As a retiree, you can expect to enjoy a mix of activities that include physical exercise, mental stimulation, and socialization. And with the average life expectancy at approximately 85 years of age, you could live more than 25 to 30 years after you retire. Your savings and investments may need to last as long as the length of your working career.
MYTH #3: YOU’LL BE ON A CONTINUOUS VACATION.
While you could live longer into retirement, you might be surprised to know that it won’t be all vacation. For one, that is an expensive lifestyle to maintain. And even if you could vacation all the time, you probably would tire of it. Secondly, while you might live a healthy life for several years into retirement, you should prepare for health issues that can hamper your continuous vacation. Many retirees slow down at some point and have health issues that limit their mobility and/or require regular medical attention. Plan for a balance of regular everyday activities, doctor visits, socializing with family and friends, volunteering, and some traveling.
MYTH #4: RETIREMENT IS THE END OF WORK.
While some retirees fill in their time with volunteering, a growing number of retirees are returning to the workforce in some capacity. Based on a survey by Merrill Lynch, 72 percent of pre-retirees age 50 and older say they plan to work part-time, full-time, or in an entrepreneurial endeavor after they retire from their primary career. With the potential for you to live well beyond 20 to 30 years after retirement, you might spend as many years in retirement as you did in your career. That’s a lot of time to make an impact by following a passion and pursuing an entrepreneurial dream.
Today’s retirement looks very different from decades ago and can be complex due to the lifestyle and number of years you could be in retirement. Having a solid plan is critical. At Reagan Financial Planning, we can help you develop a financial plan that is right for you. Contact us at (770) 658-9440 for more information
