If you’re like many seniors of (or nearing) retirement age, you’ve been planning and preparing for this time of your life for quite some time now. Still, preparing for retirement in this day and age looks a lot different than it did in decades past. Even if you’re in a great spot with your retirement plans, you may be feeling uncertain or worried.
“It’s always good to take a look at your retirement plan with fresh eyes, because a lot of things that were true back in the day aren’t necessarily true now,” says Colin Marshall, President of Senior Living Management at amavida, an active retirement community in Fort Myers, FL. “Retirement should be the time of your life that you get to finally do all the things you have been dreaming about and planning for. That’s why it’s essential to understand the truths – and the myths – about retirement living that can cause significant issues down the line.”
By knowing the truth and how to prepare, says Colin, seniors can avoid pitfalls and lay the foundation for the best retirement possible.
6 Retirement Myths (And the Reality)
Myth No. 1: Retirement planning can wait until I’m retired.
Sitting down and planning out your retirement isn’t the most exciting of tasks. A lot of people actively avoid it because they’re worried about the amount of money they’ve saved, it’s too complex or they don’t have enough time ... you get the picture. It’s not uncommon for many seniors to push off planning until it actually is time to retire – and then, they tell themselves, they can figure out what they want their lifestyle and legacy to be. Unfortunately, this can lead to things not getting taken care of until there’s an emergency or crisis that forces individuals to take a long, hard look at their plan. This can lead to expensive mistakes and heartache that could have been avoided with a bit of up-front work.
There’s an old adage that goes: “The best time to plant a tree was 20 years ago; the second-best time is now.” In other words, it’s never too early or late to start planning what your retirement will look like. Take the time to set your goals, priorities and vision for your lifestyle. Find a financial professional you trust to give you quality input and assistance so you can start your retirement off confidently (instead of just hoping everything will shake out).
Myth No. 2: Retirement planning just deals with money.
So you already have a certain dollar amount in your retirement accounts – isn’t that enough? Many people think so, but it’s important to remember that retirement isn’t just a dollar figure; it’s a lifestyle. What do you want to do with your life moving forward? Learn a new hobby, travel the world, move closer to the grandkids? List out your goals and what you want to accomplish. Having those items in place will then allow you to use that dollar figure to the best of its ability.
Myth No. 3: I don’t need to plan – I have Social Security and a pension coming my way.
While many seniors plan on Social Security and their pensions as the mainstay of their retirement income, the sad truth is that Social Security only covers about a third of seniors’ expenses. In 2019, the average monthly benefit was only $1,471. And although today’s seniors may have some pensions coming from their companies, it’s more the exception than the norm – many companies are shifting to a more investment-based plan, and companies that do have pensions may be in serious financial trouble. Again, that’s why planning ahead and meeting with a financial professional can help you make plans that maximize your benefits as much as possible.
Myth No. 4: I will only need about 80% of my current income in retirement.
Many retirement income estimators predict that you will only need about 80% of your current income. While it can be a good rule of thumb, the reality is that you may end up spending more than you plan. This can be for many reasons, including health issues, living a more active lifestyle or anything else you can think of. That shouldn’t get you overly anxious, but it does mean that you may need more income than you think, especially in early retirement.
Myth No. 5: Being retired means I won’t work at all.
Actually, many seniors find themselves going back to the workforce in their retirement – only this time, it’s on their terms. Since people are living longer, they’re looking at quite a stretch of time that belongs to them. And while taking some leisure time is definitely part of the plan, many retirees today are refocusing this phase of their life to shift to second careers, contract work or spending their time doing something they want to do – not what they have to do. Studies have shown that having a purpose is key to aging well and staying healthy as we get older. Fulfilling work in our golden years can be one way of achieving that purpose. Besides providing an additional stream of money, retirees who end up back in the workforce often find that they’re building a life they never want to retire from.
Myth No. 6: Retirement planning is a set-it-and-forget it strategy.
Hardly. These days, retirement plans are living documents that can grow and shift according to your needs, wants, plans and desires. What you want today may not be the thing you desire down the road, and that’s okay – it’s your retirement and your chance to make life what you want. Instead of approaching your financial plan as something that’s rigid and must be followed to a T, be sure to review your plan regularly (once every year or every few years) to make sure your money is working for your goals.
While retirement planning is a serious subject, it doesn’t have to be a gloomy thing that causes stress. With careful planning, open eyes and good partners on your side, you’ll be able to build a retirement lifestyle that will help you chase your dreams and live your best life for years to come.
For more information about our resort-style community for active senior living, contact us today at 877.969.0712.