Planning for retirement is in some ways, simple enough: Save as much as you can, for as long as you can. However, there are obstacles to retirement that can make things harder than they need to be. Here are some myths about retirement that could end up ruining your simple, smart approach.
Understand The Limits Of Social Security
Social Security benefits will only replace about 40 percent of your pre-retirement income. That’s the reality of the situation. Can you live off of that during retirement? The chances are slim. That means there’s really no tricks to it: No matter what you do, you’re going to need more than Social Security payments. Yes, even if you keep a part-time job. Yes, even if you reduce your spending in retirement.
Moving May Help Solve Your Problems
As USA Today notes, moving to a cheaper part of the country could save you some money. The average cost of living in Michigan is lower than the average cost of living in New York. There are also a number of states with no state income taxes. However, simply moving to a more affordable area will not be enough to make up for having low retirement savings.
Keep Investing During Retirement
It’s not wise to pull out of your investments once you retire. Just as your investments grew before you retired, they’ll keep growing during retirement. Now, you might want to shift your investments into a low-risk portfolio, but stay invested and let that money grow for you. Your retirement will be more comfortable if you do.
This article was originally posted by Chris O'Shea on savvymoney.com The material provided on this page is for informational use only and is not intended for financial, tax or investment advice. VisionBank and/or its affiliates assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.