As the daily routine of our working years grinds to a screeching halt—a halt called retirement—many people today find out the hard way that they’ve fallen for common retirement myths and failed to build up sufficient funds, or have neglected to make any significant plan to sustain themselves through the years ahead. With advanced medical discoveries, we are living longer now, and retirement could extend for two to three decades beyond the end of our work years. If you’re healthy and you’ve planned well ahead for retirement, all is well and life can be lovely.
However, many have made no plans and have relied on mistaken ideas about the future. The myths surrounding retirement planning are many and can be devastating for those who’ve depended on them for future security. Just a few are mentioned here:
“We’re young yet. There’s plenty of time to plan for retirement.” The problem with this is that it’s flawed thinking. Retirement should be a priority from the very beginning of your working days, no matter what kind of work you do. The years go by very fast, and before you know it, you’re at the point where you realize that a potentially large chunk of your life has no plan in place.
“We’ll be getting pensions and Social Security, and that will be enough.” Another problem arises with this myth, in that many companies have gone under or have cut costs drastically, including pension payments. If you still receive a pension, it may be much less that you’d counted on. With talk of Social Security going broke, and extending the age for full retirement, there is nothing dependable about Social Security. It’s not the security our seniors once enjoyed. Depending on either or both of these incomes is a huge mistake.
“I’ve always been healthy, and I’ll always be healthy.” Really? How do you know that? It is a myth that everyone who’s healthy in their younger working years will remain so after retirement. We don’t have a crystal ball to see into the future. There are many factors that come into play after retirement that affect health, and many retirees find health issues cropping up that they never imagined. This, of course, drains whatever savings one may have accumulated over the years, and without adequate insurance, enough savings, or a long-term care insurance plan, elders can find themselves in trouble financially.
“There are plenty of part-time jobs; I’ll get one.” There may be some part-time jobs in your community, but suppose you aren’t suited to them. Or worse yet, suppose your health begins to decline and you can’t work. Many seniors do work part-time after retirement, but there’s no guarantee of that job continuing if you can’t keep up the pace due to lack of energy or you develop an illness. Suppose part-time jobs go away in your community and you can’t find one you can do.
“Our children will take us in and take care of us in our old age.” Think again. Our children have their own lives and will be finding it even more difficult to make ends meet in the years ahead unless our economy in the U.S. does a dramatic turn-around. We cannot, and should not, depend on them to take care of us when we age. The days of children automatically taking in their aging parents are in the past for most families. What was once a natural progression of life is no longer always possible.
“We’re not looking for luxuries and we don’t travel – our retirement won’t be very expensive.” The myth here is that everyday no-frills living is inexpensive. It’s possible to live inexpensively to a degree for people who are good at frugality, but realistically, even the cost of routine, everyday living is skyrocketing. The cost of the basics of food, clothing, and shelter will be out of reach without good retirement planning. We all see increases in the cost of just the basics even now, and these costs will go higher.
“The future will take care of itself.” Well, the future seldom takes care of itself. It’s up to us to use our resources wisely and put enough aside as younger people. Yes, there are mortgages, car payments, the cost of raising children and then their college education, plus the many other expenses incurred when family life begins. But all the while, the time is passing and the future is drawing nearer. The time to plan for retirement is early in life.
These are just a few of the myths involved when it comes to retirement planning. If you need help with this, and most people do because of the very complex nature of it, consult a financial advisor early on. If you’re already into retirement and have no plan, you can still get advice on how to go forward. Don’t let inadequate retirement planning rob you of the joy of what should be your golden years.