{"id":13954,"date":"2022-10-12T12:44:02","date_gmt":"2022-10-12T17:44:02","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=13954"},"modified":"2022-10-17T18:29:37","modified_gmt":"2022-10-17T23:29:37","slug":"the-top-10-myths-about-retirement-planning","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/the-top-10-myths-about-retirement-planning","title":{"rendered":"The Top 10 Myths About Retirement Planning"},"content":{"rendered":"
Retirement is filled with hopes, dreams, and yes – fears of the unknown. To help you avoid common retirement misconceptions, Johnson Wealth & Income Management are reviewing these 10 common retirement planning myths with you.<\/strong><\/p>\n People entering retirement have more than likely heard some wisdoms but not all of them are accurate. Retirement planning<\/a> takes a lot of preparation, and if you don’t have the correct tools in hand you could be looking at mistakes down the road.<\/p>\n After all, you\u2019ve worked hard to build a plan that can fulfill your dreams during retirement. Don\u2019t you want to get the most from your savings? Johnson Wealth and Income Management<\/a> has compiled a list of myths and mistakes try to avoid in your retirement plan.<\/p>\n Here\u2019s the top ten myths you need to know.<\/span><\/b><\/p>\n Healthcare<\/a> is one of the most rapidly growing costs for many retirees. <\/span>In one study conducted by annuity,<\/span><\/a> a healthy 65-year-old couple retiring this year can expect more than $662,000 in healthcare costs alone. This number includes medicare premium, deductibles and copayments for medications.<\/span><\/p>\n It\u2019s important to take a step back and look at the bigger picture. While medicare is a great thing to have, it’s important to know that it doesn’t cover everything. If you’re nearing retirement, now is the time to save aggressively so you have enough money to help cover your healthcare expenses.\u00a0<\/span><\/b><\/p>\n One of the biggest retirement myths is not adjusting your total amount of adjusted gross income. As a retiree or a soon to be retiree you should be managing it. Your AGI helps determine what tax bracket<\/a> you are in. Depending on where you call on the AGI scale, you could possibly be looking at paying more in taxes.\u00a0<\/span><\/p>\n Your AGI has an effect on how much you will pay taxes on Social Security and medicare premiums. By having a lower AGI, you can help keep more of your retirement income for yourself. In some cases, you can help retain money by having less income.<\/span><\/b><\/p>\n When you’re planning for retirement, it’s easy to think that debt is a problem but not all debt is bad debt<\/a>.\u00a0<\/span><\/p>\n \u200b\u200bFor example: Your home mortgage may carry a much lower interest rate than credit cards or other types of debt. That being said, if you’d like to lower your debt burden during retirement, downsizing your mortgage might<\/em> be a good option. You can sell your current home and help purchase a more affordable one using the equity from the sale towards the purchase. You’ll help finance a smaller amount, which could give you more affordable monthly mortgage payments.<\/span><\/p>\n Another option is to finance a part of your new home and invest the proceeds from the sale into other investment vehicles that have the potential to earn a higher rate of return than the rate you’ll pay on the new mortgage. Keep in mind that selling your home may come with tax obligations, so work with someone who understands your state and local tax circumstances.<\/span><\/b><\/p>\n Prime time news slots are filled with segments on workers who fail to save for retirement. You can easily be persuaded to think that most people nearing or in retirement are going without the basic necessities of life.\u00a0<\/span><\/p>\n Many people are afraid that they won’t be able to afford to retire\u2014that they’ll be living on 70% of their final income, or less. But the truth is, most mid-career families live on 35% of their gross income after mortgages and debt payments are subtracted. By retirement, many of those expenses have disappeared, meaning people can get by with less income.<\/span><\/p>\n Retirement is a time to enjoy your life. You’ll have more time to spend with family, friends, and loved ones. You can travel more often and explore new places. You can spend more time volunteering at your favorite cause.<\/span><\/p>\n But before you retire, make sure you think about the new expenses<\/a> that will come with your free time. It’s easy to assume that the cost of commutes, lunches out, and casual spending will go down once you retire\u2014but they probably won’t. If anything, they’ll go up because you’ll have all day to spend money on them.<\/span><\/p>\n That’s why it’s so important to plan for your new daily and monthly expenses now. If you don’t plan for these costs as part of your retirement budget, it could lead to unexpected debt in retirement.<\/span><\/b><\/p>\n It’s a common misconception that if you’re retired and not working, you should be moving your money out of the stock market. This is due to the fact that many people assume they can’t afford to retire until they have a large nest egg. It begs the question, should investments<\/a> be moved into safe funds after retirement? The truth is, it’s more important to have a diversified portfolio<\/a> in the long run.<\/span><\/p>\n Putting money in CDs or a bond portfolio can be just as dangerous as being overly aggressive in investing. As life expectancy extends, people risk running out of cash if their investments aren’t at least keeping up with inflation.<\/span><\/b><\/p>\n#1. A Majority of your Healthcare is Covered by Medicare<\/b><\/h4>\n
#2. Paying Less in Taxes During Retirement<\/b><\/b><\/h4>\n
#3. All Debt is Bad Debt<\/b><\/b><\/h4>\n
#4. You Won’t be Able to Pay the Bills<\/a><\/b><\/b><\/h4>\n
#5. Not Accounting for Day-to-Day Expenses<\/b><\/b><\/h4>\n
#6. Moving Investments to Stable Funds<\/b><\/b><\/h4>\n
#7. You\u2019ll Retire When You Want To<\/b><\/b><\/h4>\n