Retirement lies that we fool ourselves with – Part #1
Today we will cover how we tend to tell ourselves sweet little retirement lies like these and how we can avoid falling for them, once we understand where they come from. I’ll spend less when I retire…My taxes will be lower when I retire….What’s the point, I’ll never be able to retire…
Retirement Lie # 1 – “I’ll spend less when I retire.”
All the ads showing the perfect retirement show people traveling, golfing, laying on the beach or spending time (aka money) with their grandkids. I bet you spend more money on weekends when you aren’t working, compared to the days you are in the office. Most things you buy now will get more expensive as time goes on. In my experience, most people will spend similar or potentially even more money in retirement. This isn’t even taking into account Medical expenses.
Retirement Lie #2 – “My taxes will be lower when I retire.”
You may end up in a lower tax bracket. You may also end up with a similar tax bill once everything is said and done. Don’t forget the money you pull from IRA’s or 401(K) will be taxable. Even part of your Social Security may be taxable.
Retirement Lies #3 – “What’s the point, I’ll never be able to retire”
It’s obviously easier to plan for retirement the earlier you get started. However, it’s never too late to improve your retirement plan and increase your nest egg contributions. If you are 50 or older you can put away up to $24,500 into a 401(K) plan each year. Also the longer you work, the fewer years of retirement you will have to save for.
Are any of these retirement planning lies sounding familiar yet?
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