When it comes to planning for retirement, there are plenty of myths and misconceptions that can derail even the most well-intentioned plans. At McIntosh & Associates, we believe that understanding the facts is essential for making sound financial decisions. In this blog, we’ll debunk some of the most common myths surrounding retirement planning so you can feel confident about your future.

Myth 1: “I’ll Need Less Money in Retirement”

One of the most pervasive myths is that your expenses will dramatically decrease once you retire. While some costs may drop – such as commuting or work-related expenses – other costs, such as health care, may rise significantly.
According to a recent study, health care alone can account for nearly 15% of a retiree’s total expenses, and this number is only expected to grow.
In reality, you may need to replace 70% to 90% of your pre-retirement income to maintain your current standard of living. Planning based on realistic expectations will help ensure you’re financially prepared for retirement.

Myth 2: “Social Security Will Be Enough to Live On”

Social Security is an important safety net, but it was never designed to be your sole source of income. In fact, Social Security benefits only replace about 40% of an average worker’s pre-retirement income.
To bridge the gap, it’s essential to have other sources of income, such as personal savings, retirement accounts, or pensions. Relying too heavily on Social Security can leave you financially vulnerable in retirement.

Myth 3: “I Can Always Work Longer”

Many people assume that if they fall short of their retirement savings goals, they can simply work longer. However, this isn’t always possible. Health issues, caregiving responsibilities, or job market challenges could force you into early retirement unexpectedly.
Instead of relying on the possibility of working longer, it’s better to save more now and build a robust retirement plan that can accommodate life’s uncertainties.

Myth 4: “I Don’t Need to Plan for Health Care Costs”

Ignoring future health care costs can be one of the biggest mistakes you make in retirement planning. A report from Fidelity estimates that the average couple will need around $315,000 for medical expenses in retirement. This figure doesn’t include potential long-term care needs, which can add even more to the overall cost.
Planning for health care early and considering options like Medicare Advantage or long-term care insurance can help mitigate the impact of these expenses on your retirement savings.

Myth 5: “It’s Too Late to Start Saving for Retirement”

Many people believe that if they haven’t started saving by a certain age, it’s too late to build a solid retirement fund. The truth is, it’s never too late to start. Even if you’re in your 50s or beyond, contributing to tax-advantaged accounts like IRAs or 401(k)s, taking advantage of catch-up contributions, and optimizing your investment strategy can significantly improve your retirement outlook.

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Resources:

• Fidelity: Retirement calculators and resources: www.fidelity.com
• Social Security Administration: Benefits estimator tools: www.ssa.gov
• AARP Retirement Planning: Tips and guides for retirement savings: www.aarp.org

Insurance products are offered through the insurance business McIntosh & Associates, Inc.. McIntosh & Associates, Inc. is also an Investment Advisory practice that offers products and services through AE Wealth Management, LLC (AEWM), a Registered Investment Adviser. AEWM does not offer insurance products. The insurance products offered by McIntosh & Associates, Inc. are not subject to Investment Adviser requirements. Investing involves risk, including the potential loss of principal. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 2630699 10/24