7 Incredibly Common Retirement Planning Myths Debunked

By BankBazaar | November 22, 2017

Has planning for your retirement crossed your mind? Before you begin, here are some myths you need to be aware of.

7 Incredibly Common Retirement Planning Myths Debunked

Have you already planned for your retirement? If you have, then that’s fantastic! But, if you’re still looking for ways to make those golden years of your life count, you better hurry up. The earlier you start planning and saving, the better your chances are of building a decent retirement fund. After all, your bank balance needs to match the standard of your retirement dreams, doesn’t it?

To make your retirement dreams come true, you just need to manage your money better. But, more importantly, you also need to be careful about all those myths that can potentially destroy your dreams of a happy retired life.

These are common misconceptions that need to be debunked in order to get your retired life up and running. Listening to what conventional wisdom says is good. However, following it blindly is not.

Additional Reading: Retirement Planning For Everyone

Although you need to be a bit careful, there’s no need to panic. All you need to do is ensure that there’s no room for silly mistakes or tiny loopholes in your plan that could lead to some major repercussions later. Once that’s done, more than half of your work is taken care of.

So, what are these myths anyway? Let’s find out.

  • Myth #1: Retirement planning? I can start whenever I want to.

Like everything else, planning for your retirement has to happen at the right time. And, yes, you guessed it. The right time is NOW! The basic logic behind getting your retirement planning right is to start as early as you can.

Even if you’re still in your 20s and this is your first job, there’s no room to relax. You need to think way ahead of time (sometimes that could be even mean planning decades ahead). It’s simple, really! The earlier you start, the better you can plan.

You get a lot of time and resources to ensure that you make all those dreamy retirement plans turn into a reality. No matter how hard or inconvenient it is for you, you have to start now.

  • Myth #2: There’s nothing ‘tiring’ about re-tiring

Although the idea of retiring might sound relaxing, getting there isn’t that easy. There’s a lot more to it than merely deciding what you want to do, or where you want to live post-retirement. We aren’t’ saying that it isn’t important, but there are some other crucial factors that you need to consider, like your savings, investments and pension plans.

Since many of us aren’t government employees, we need to take care of our own pension plans. Choosing good investment options, investing in Life Insurance policies and investing in the stock market are some things you could consider.

Additional Reading: 5 Ways Retirees Can Live A Good Life

  • Myth #3: Your inheritance is enough for your retirement

No matter how much you inherit, you still need to save for your retirement (well, unless your parents are millionaires). If you think that inheritance money will last you a lifetime, you’re wrong! You need to plan properly, keeping inflation rates in mind.

Relying on merely the things you inherit is not going to be enough. You need to plan according to your living standards. Remember, the cost of living will only increase, and there’s a fair chance that you could outlive all your inheritance money and repent later. As the saying goes, better safe than sorry!

  • Myth #4: Health expenses aren’t important

One of the most important things you need to consider for your retirement is health expenses. As you grow old, your health is only going to need more attention. It makes more sense to think of all those heavy medical bills now instead of worrying about them when they sneak up on you out of the blue.

No matter how many hours you spend at the gym, your health is going to need some attention later, so be prepared!

Additional Reading: Why Health Insurance Is A Must In Financial Planning 

  • Myth #5: Your expenses decrease considerably post retirement

This is one of the most common myths people believe in. Although it may seem like the most inexpensive phase of your life, the harsh reality is completely different.

Even if you have your own house and car by now, you need to think of other crucial things as well. Your health, like we mentioned before, will need some looking after. You will also have to take into consideration your food expenses, home maintenance costs, utility bills and more. Without a regular income to support you, it is imperative that you draw up stringent budgets in anticipation of your retirement.

Additional Reading: How To Retire Rich 

  • Myth #6: Your spouse’s retirement plan will accommodate you as well

If you think that your spouse’s retirement plan is enough to cover you as well, you’re absolutely wrong. The cost of living is only going to increase as you grow older. Would you like to risk your financial security just because you’re too lazy to plan now?

Remember, you’re two different individuals and hence your needs are going to vary. One person’s retirement plan (no matter how elaborate it is) can’t cover the other one as well. Moreover, it’s always better to have some extra financial support. In case one of you needs some extra free cash, the other one’s retirement fund could come in handy. Plan smart, always. 

  • Myth #7: You must always invest safe and stay away from risks

If you’re planning for your retirement, you must be willing to take a few risks. You can’t simply sit and rely on those safe investments like Fixed Deposits. That doesn’t mean that investing in Fixed Deposits is a bad option, it just means that you need to consider other investment options as well.

Some investments might be slightly risky, but provide great returns as well. SIPs are a great option. Give them a thought.

Additional Reading: Threats To Your Retirement Corpus

We agree that retirement planning isn’t one of the easiest things to do. But, hey! Think about all those fancy dreams! You want to live them, don’t you? So, in case you believe in any of these myths, it’s time to change your mind and start planning for your golden years as soon as possible.

Looking for more money-related advice? It’s all a click away!

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Category: Retirement planning

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