Retirement should be a time we look forward too! Isn't retirement the reason we have been working? I know it isn't the only reason we work because we work just to survive but aren't we working so that when the day finally comes that we don't want to work anymore or can't work anymore we are ready to survive and hopefully thrive.
As we strive to make the most of our lives and our retirement there are a few things misconceptions that we really need to be aware of. According to a recently survey done by Charles Schwab & Co there are some misconceptions that many of us don't realize that we are being duped by. In order to help us get the most of our retirement we need to reveal these misconceptions and make sure that we aren't being duped by them. Let's dive into some common retirement misconceptions.
Those who believed they were the most knowledgeable were more likely to agree with misconceptions about important planning decisions. These people were also more often optimist about their financial future.
This misconception is very disturbing and makes me even wonder about my knowledge and if I myself fall victim to misconceptions because I feel more knowledgeable than the regular person about financial planning. What should be done? I think we need to make sure that our ego and knowledge doesn't get in the way of looking at our own financial situation as careful as possible. It is much better to be safe than sorry. No matter how good you feel like your financial and retirement situation is take a look again. Study your situation and if you tend to hold to the safer side of things hopefully everything should be ok.
You should start taking social security as soon as you're eligible. If you believe this concept you should strongly look at your situation again. I have written about this in previous posts and the simple fact is that if you can hold off in taking social security and also from taking from your IRA or 401k you can really improve your retirement. Holding off a few years can add a significant amount of cash to your yearly withdrawal in turn giving you a better retirement with more to spend or just more for your safety net.
If you need cash while you are still working a 401k plan is a good place to turn for a loan or withdrawal. From the findings nearly one in three believe this. While there may be certain emergency situations that could warrant a loan from a 401k it should almost always be considered the last resort. Taking any money from your retirement savings can really hurt your savings in more than one way. Not only will you have less when finally retiring but loaning from your 401k can have negative tax consequences and hefty fees if you don't pay it back. It is strongly urged to do everything you can to not loan from your retirement accounts.
By the time you are 50 it is too late to make a difference in your financial future. This is by far a bad misconception. While you could have made a huge impact if you would have started early you can still make a difference. Just think, you could have a solid 15 even 20 years more of savings ahead of you. That can really help and make a big difference. There is also the catch-up contribution that is in place to help.
There are plenty of misconceptions that we might not even know is incorrect. The best way to make sure you are on the right track is to continually reevaluate where you are at and where you need to be. Of course there are many things that need to be done in order to get the most out of your retirement but start planning today.
If you are on the right path then looking at different options is a great way to get more out of your retirement. Many think that they are confined to investing in the stock market or bonds with their retirement funds but that is not the case. With a self directed IRA or 401k you can invest in alternative investments like gold or real estate. Get more out of your retirement and diversify with a self directed IRA
Author: Nick Barker