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Saving up for your retirement, which you have been dreaming about is absolutely possible. It all starts with saving and being knowledgeable of potential risks you might face as you venture into your retirement proper.
There are retirement planning myths that make it difficult to know what is right to do. These retirement planning myths can hold potential clients back from making hard and crucial decisions. When it comes to making the right retirement planning decision, these debunking retirement planning myths can mislead you. Some of them are filled with enough facts that make the myths believable. Sometimes, the way it has been passed all around make it seem as if it were all based on concrete evidence.
Most times, we are bombarded with some rules that are often repeated on a daily. But, it doesn’t mean that they are actually truths, because it could end up being wrong and just mere myths. For example, you believe that it is healthy and convenient for you to invest in your company retirement plan, as it is all you need in order to save enough money for retirement. Or, you believe to save enough money that can cover over 10years or even 20years for your retirement. Or, If you save something that is very little, you would end up not having enough money to pay all your bills in the long run.
Well, these can affect your retirement planning in a way that could hurt you. Because, they are just myths and your retirement could be at stake. It is much easier to know a problem and be able to solve them than you have no clue about the problem and then you can’t solve them.
Now, let’s take a look at some of these retirement planning myths and ways to debunk them completely.
Retirement Is All About The Money
Well, truth be told retirement is not just all about the money. It also entails, creating a long-lasting retirement corpus and this is where time comes in handy. Time is very essential in retirements and with this, (time) you can balance the money aspect of retirement with other activities.
You should think of other non-financial aspects of retirement, like reviving your hobbies, rekindling and reconnecting with your friends and family as well as managing your health.
Retirement Planning Is Simply For The Rich
The fact that you are wealthy doesn’t mean that planning your retirement is going to be an easy task for you. It would still take the same processes for you to arrive at what’s best for you. Without the right plans and approach to suit your situation whether you are rich or middle class, it may mar your retirement completely.
I Am Too Young To Plan For Retirement
Well, are you for real? Having this mindset about planning your finances takes a toll on you in the long run. It is not too early to start creating your budgets and goals.
Don’t go around having the ideology that, you have to get to a certain age in life before you start planning for your retirement. Even if you are in the womb, it is not too bad either to start planning because it’s your future right here in your able hands.
Delay Savings For Later When It Is Much Easier
Many people, believe that it will be easier to save money for retirement much later in their career lives rather than do it now. They end up procrastinating the time to begin. Some people, assume that there is no need to start up saving for their retirement now. But the truth remains the same, it is more difficult to save enough money when you delay.
I Will Be Living On Less Money When I Retire
Retiring is one thing and your approach towards retiring is another. At this stage, you may decide to live on less money when you retire. But, at the initial stage of retirement, you might see yourself touring around the world or taking up new cooking adventures just in the first few years.
It is much more realistic/wise to, first, look through all you want and where you’d like to spend your retirement. This will enable you get the proper estimates on your retirement cost. Instead, of calculating and planning your retirement on assumptions.
I Will Pay Lower Taxes When I Retire
Retiring doesn’t necessarily mean that payment of taxes will be lowered. It depends mainly on your situation. You may earn a lesser amount during retirement and this may lower your taxes or you could end up losing your tax breaks you enjoyed when you were still working.
Therefore, it is difficult to predict where you would have the tax breaks as this can change. It is pertinent to note that, it isn’t right to assume when it comes to taxes.
“Everyone Does The Same, So I Have To Do It In This Particular Way” Myth
Life teaches us that there are different strokes for different folks. So, there isn’t one right rule approach towards retirement. It is something personal and shouldn’t be given the general rule initiative. What you want in mind can be far different from what another wants.
So, why settle for what everyone is doing, when all you should do is doing what is right for you. What would match your set goals and fit appropriately for you? It is required of you to have in mind that there is no one right rule approach to retirement.
“That Annuity Is Not Good At All” Myth
Just like the myth about one right rule approach that everyone should follow, this retirement planning myths says that some financial vehicles are bad and should not be made use of.
Well, you can’t generalize the fact that some investment vehicles are good and the others are bad. Whether, it isn’t right for you doesn’t mean that it would not be right for another. Everything has its own advantage and disadvantage. So, what you should be looking at is, that which is more appropriate for your situation with respect to your goals and needs as well as your risk tolerance.
Retirement Means That “I Can Stop Investing”
Even if retirement was commonly known as an end thing after the whole working spree and it is time to settle down. Funny enough, it is not that way any longer. Retirement is a whole new life altogether in one’s life. It is another phase of life, therefore, it is not in your best interest to stop investing.
This time in your life opens many opportunities for you to invest.
It is therefore important to note that, whatever financial or investment advice one chooses, should be based on the person’s personal situation or goals.
Nothing should be done based on assumptions or unclear information, because, doing what is appropriate for you is key. You can stay on track by reviewing your strategy and evaluating your spending and savings rate.
No one, ever said that planning your retirement was going to be an easy task. But, it is better to plan appropriately and early than to waste your time procrastinating, therefore risking your financial security.
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