When it comes to retirement, finance can be confusing — even intimidating. After all, the average layperson is charged with the task of creating a nest egg that will last for decades.
So it’s no surprise that plenty of myths have been bred about retirement planning, in order to make this subject simpler and easier to understand. While most these myths come from a good place, they shouldn’t be applied to something as unique as your financial life.
In my decade of helping individuals retire, I’ve seen plenty of individuals put major stock into preparing based on retirement “rules” — which, in reality, turn out to be harmful myths that set them back.
Without further ado, here are some of the most common and harmful retirement myths, and what you should do instead to prep for your golden years.
Myth #1: “My spouse will take care of everything.”
It’s true that teamwork can make the retirement dream work — combining your financial powers in marriage can be very effective. However, that doesn’t mean you should completely rely on your spouse.
Even if you have one person carefully managing your finances, should the worst happen, you don’t want to be in a scenario where you’re left blindsided financially. It happened to my mother when my father passed; he took care of the finances, and she was completely overwhelmed afterward because she had turned a blind eye to planning. Financial success as a couple relies on both partners being aware of every moving piece of the picture.
Women also have other concerns to worry about. On average, we live longer, tend to be extended caretakers for our families, and earn less. Even if your partner is doing most of the investing, you need to make sure these needs will be taken care of.
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Myth #2: “I’ll pay lower taxes and need less money in retirement.”
There are plenty of myths surrounding spending rates in retirement, such as the idea that you’ll need 65–90% of your pre-retirement income to maintain your lifestyle. While that might work for some, it will leave you underprepared if you plan to do things like traveling, which can cause your spending to be higher than it was pre-retirement.
Rather than relying on this myth, consider mapping out your goals for retirement, like where you want to live, to get a realistic sense of your income needs.
Although you’re done with paychecks — and the taxes associated…