It’s one of those periods that we never think will happen, but as time progresses most of us find ourselves counting down the years until we reach that elusive retirement age.
Unfortunately, there are more than a few misconceptions when it comes to retirement. Some people believe that there is a golden pot waiting for us as soon as we reach the required age (which seems to change by the year), while others just don’t have a clue what the future holds.
This is where today’s guide steps in. We will now take a look at some of the most common retirement myths, and start to debunk them for good. Here goes.
“My costs will decrease when I retire”
One of the biggest myths doing the rounds about retirement is that your costs will decrease. Some are even under the belief that they will spend 30% less when they reach the age.
As it turns out, this isn’t the case in the slightest. Whether it’s elderly care fees, or even saving for a funeral (there are always a lot of raised eyebrows at how much funerals cost), there are a whole host of “hidden” costs that you won’t have been used to.
Sure, your mortgage might have been paid off, but when the above is combined with the fact that you also have a lot more time of your hands, we start to wonder just where this original myth came from in the first place.
“You will retire at 65”
In truth, we could have used an [insert any age here] line. The age that people retire is constantly changing and while it might be set at one number at the moment, by the time comes for you to retire there’s every chance that this will have increased again.
“You will be in a lower tax bracket”
Again, there are no guarantees to this next myth. You might be in the top tax bracket now and while you won’t be receiving the same salary when you reach the retirement age, this doesn’t mean to say that you are about to drop out of this bracket.
If you have saved wisely, and contributed to a big pension pot, you might still be taxed healthily. Let’s not forget that you don’t get taxed on the money you put into a pension – you get taxed when you receive it later down the line.
“I can delay saving for retirement when it’s easier”
Finally, even if you ignore all of the other myths we have documented, don’t under any circumstances fall into this final trap. An incredible amount of people decide not to save in their early years of working, as they would rather cash the money there and then. Apparently it’s easier to save later on but in essence, it isn’t.
If you start early, things suddenly become a little more secure. Additionally, you don’t have all of the big fees to contend with, whether it’s buying your own house, one for the kids, or even helping them out with the university fees.
