Planning for your retirement is a crucial step to ensure that you’ll lead a comfortable life once you reach your golden years. But most people still make broad assumptions about their retirement plans. It’s vital to be aware of a few of the most common planning mistakes that can affect your retirement savings. So, here are a few of the most common myths that people have about retirement planning.
Common misconception #1: You shouldn’t worry about your retirement because you’re still young.
The Motley Fool says that it’s wrong to assume that you don’t need to start saving up a portion of your salary for your retirement at an early age. The truth is that the more that you put your retirement plan on hold, the more difficult it’ll be to save enough for your golden years.
Starting up an early age will make it much easier for you to reach your target savings by the time you reach your retirement. Doing it at a later stage only means that you need to put up more money so that you can catch up on your savings.
Common Misconception #2: You can always work longer or get a part-time job if you haven’t saved enough for your retirement.
Although it’s possible to continue working until you reach your prime years, certain factors can affect your plans. Forbes says that unforeseen changes to your health can affect your ability to work. There is also a risk that you won’t be able to perform specific roles for the job because you’re not physically fit to do it.
Even if you’re in good health, there’s also a chance that the company is downsizing. The company may also have layoffs. In most cases, the most-long-standing employees get laid off from work. That’s why it’s highly advisable to get help from a financial advisor in a state like Utah to help you plan for your retirement.
Common Misconception #3: Medicare will cover all your healthcare expenses once you retire.
You’ll become eligible for Medicare once you reach the age of 30. But the federal health program includes very little in all your expenses. Although they cover several health expenses, it still has deductibles and premiums. It is almost the same as most health insurance policies.
There are also certain events that Medicare won’t cover completely. It includes dental care, long-term care, eye exams, and hearing aids. You’ll have to cover for these expenses unless you have another policy that can cover them.
Common misconception #4: You’ll only need 70% of your pre-retirement income once you’re in your prime years.
Although it may be true for some people, it doesn’t necessarily mean that it’ll be applicable for you, too. Remember that everyone’s needs are different. So, your expenses once you reach your golden years may be different from the rest.
Although it can take some time, the safest way to guarantee that you have enough money for your retirement is to crunch the numbers. You need to get an estimate of your life expectancy. Next, see if your savings will be enough to cover for your projected living expenses.
These are only a few of the most common misconceptions surrounding retirement planning. If you’re still unsure about how to start your retirement savings, seek the advice of a financial adviser to build up your retirement plan.