Top 5 Retirement Myths You Probably Believe
We only use ten percent of our brains. Napoleon was short. It takes seven years to digest a piece of gum.
Myths like these are pervasive and stubborn. Perhaps you are just now realizing the above statements are even myths at all! Regardless, whether you first heard them on an evening sitcom, around the dinner table, or as a warning before your mom gave you a stick of juicy fruit when you were a kid, they were easy to pick up and difficult to get rid of.
But unlike these common household myths, which are basically harmless, widely held false beliefs about retirement can lead to unexpected bills, sore disappointments, or missed opportunities.
That is why I’ve compiled some of the more common and destructive retirement myths, so you can let them go and grab ahold of a better, more secure retirement.
- “Health Insurance in Retirement? Won’t Medicare Take Care of All That?”
This is a big one. Many people think that, just because the government provides Medicare for those 65 and over, the program is designed to meet all of their healthcare needs. This is, unfortunately, not the case. In truth, it’s not even close.
You see, Medicare has very costly gaps, ranging from small, pesky copays to potentially devastating out-of-pocket spending. Firstly, Medicare simply doesn’t cover vision, hearing, dental, or long-term care. And then—in other areas such as skilled nursing, hospital stays, medications, and much more—the coverage is limited. These gaps will not always be overly expensive, but—since there is no out-of-pocket spending limit with Medicare—one major health crisis can quickly turn into a financial crisis as well.
That is why we recommend talking to an advisor about getting a Medicare Supplement Plan to fill in those gaps or, if that is too expensive, a Medicare Advantage Plan that will put a cap on your potential out-of-pocket spending.
- “Social Security Will Take Care of Most of My Income, Right?”
Although Social Security isn’t going broke and skipping out on promised benefits like some believe, the program is not (and was never) designed to provide anyone’s full retirement income.
In fact, according to Social Security’s website, the government program is only designed to replace about 40% of a person’s pre-retirement income. As a general rule of thumb, many financial advisors predict that retirees will need 70-80% of their pre-retirement income to live comfortably That leaves 30-40% up to your nest egg. Can your nest egg handle it?
- “Work? Retirement? Those Two Words Don’t Belong in the Same Sentence.”
People are living longer, and living longer means having more time on your hands. When people only lived ten or so years after age 65, it made sense to think of retirement as a time to wind down and call it quits. But now that the average life expectancy is approximately 85 years, continuing to work (at least part time) makes a lot of sense.
According to a Merrill Lynch Retirement Study, 72% of pre-retirees 50 and older say that they plan to work at some point in their retirement. Additionally, the same study showed that 47% of current retirees have worked or plan to work sometime in retirement.
- “Starting a New Career is For Young People, Not Retirees.”
But perhaps you don’t want to go back to the stress of your former career. Or maybe you the whole reason you retired is because you weren’t physically capable of performing the backbreaking labor.
Well, in that case, why not bust another myth and start afresh? Why not take a hobby or a lifelong aspiration and make a new career out of it?
I think Christian writer and thinker, C.S. Lewis, said it best: “You’re never too old to set a new goal or dream a new dream.”
And, according the aforementioned Merrill Lynch Retirement Study, many agree. In fact, nearly three-fifths (58%) of working retirees believe retirement is a good time to switch careers. So dream big. There’s more room to take career risks when you have a nest egg to lean on.
Maybe you can even start your own business. Did you know that retirees are three times more likely to be business owners or self-employed than pre-retirees?
- “Retirement Consists of Two Steps: Clock Out and Walk Out.”
Unfortunately, that’s just how you quit working. It’s not how you truly retire. Retirement involves careful planning and a long list of to-dos. This list must include signing up for Medicare, purchasing supplemental coverage, deciding when and how to take Social Security, considering rolling over your 401(k), as well as other non-financial items such as travel plans or simply deciding how you are going to use your extra 40 plus hours a week.
Do You Need Some Expert Guidance Concerning Your Retirement Transition?
In that case, you are in the right place. In our Life After Work workshops, we discuss retirement transition. Sign up today for our free workshop.
Our Workshop Promise To You
- There will be no high-pressure sales and no obligations, just insight about your retirement transition.
- You will feel less overwhelmed and anxious about your decisions and options.
Some may not think we will live up to our promises, but that is just another common retirement myth! Our next workshop will be held virtually on Zoom on June 25 at 5:30 pm. We hope you will come to learn more. The workshop is free! Sign up today at https://seniormark.com/workshops/!