Five Common Retirement Myths
One thing you never want to mess around with is your retirement. It’s important that you find a financial company that can provide you with a sound investment plan you can trust. Personal relationships are important, as you should only put your retirement money into the hands of someone who has your best interests at heart. Do your own research to find out what retirement will be like. Also, be aware of the five common retirement myths:
Planning Can Wait
Planning for retirement never can wait. Compound interest is what drives retirement accounts. The key concept with compound interest is that it accumulates over time. When you start investing money early, compound interest can be the strong backbone of your retirement account. You don’t have to put loads of money in, just enough to get going. Any a little bit counts with compound interest.
Work Will Always Be There
Unfortunately, the dream that you’ll be able to work for as long as you like isn’t a reality. Statistical evidence proves that people are having a hard time staying at their jobs past the age of 65. While this is a hard reality to accept, it’s one that you must if you want to be prepared for retirement.
Medicare is All You’ll Need
Medicare was created help pay for medical expenses during retirement and it does, but only to a certain extent. There are two important Medicare parts: Part A and Part B. Part A covers all inpatient services, and hospice and nursing facility costs. Part B covers outpatient services. What most people don’t realize is that Part B doesn’t always cover all types of care. A 20% co-payment is often required under the terms of Plan B. In today’s expensive medical world, a 20% co-payment can be a lot money, especially if you weren’t planning for it.
Taxes Will Be Lower
A common retirement myth is that you will pay less in taxes when you retire. While this can sometimes be true, it isn’t always necessarily the case. If you wind up making the same amount of income in retirement as you did when you were working, you’ll stay within the same tax bracket and pay the same amount of taxes. Also, after retirement you might not be eligible for certain tax breaks that lowered the amount you were taxed. Additionally, taxes are always at the risk of increasing. The bottom line is: your taxes in retirement might be lower, but it’s best not to count on it.
Social Security Will Be Enough
Social Security will contribute to your retirement, but it will never be enough to sustain it. Even the maximum Social Security amount will put you right at an amount that you could only possibly hope to squeak by on. It’s recommended that you invest and save with the idea that social security won’t be enough.
With the information provided in this article, you now have a better understanding of some of the myths associated with retirement. Use this knowledge to your advantage by being prepare. Remember, it’s never too early to start planning for retirement and any little bit you invest now will help you later.