Rules of Thumb Can Become Outdated – Here Are a Few That May Not Work.
When it comes to money, things change at a snail’s pace and that’s certainly true of retirement decisions. Many retirement decisions are still made based on conventional wisdom.
Sometimes, by luck, that results in the appropriate decision but often the result leaves the person with good results–not great. Below are 7 retirement myths still prevalent in the financial planning space.
1. Take Social Security Early – It Might Not Be There
Too many people still think they should take Social Security at the earliest age possible.
This is an appropriate decision for only a small sector of the population. Particularly for someone who is married and was the higher earner, taking Social Security early could be harming your future financial security. Instead of “take Social Security early, take it when it financially makes sense.
That means creating a detailed financial plan, often in consultation with a professional. This analysis should consider life expectancy, past and present marital status, spousal and survivor benefits, inflation, and one’s lifetime income needs.
2. Medicare Will Cover All My Medical Expenses
Many people think that once they turn 65 they won’t have to worry about medical expenses because Medicare will cover those costs. Although Medicare coverage begins at 65, it will only cover about half of your total health care related expenses. Instead of “Medicare will cover it,” live in the mindset of Medicare being a piece of your total healthcare strategy.
You will probably need a Medicare Supplement or Medigap policy to help close the gaps in coverage.