Retirement is often referred to as the ‘golden years.’ But does this time you worked so hard to reach really align with how you thought it would be? In this post, we figured it would be good to debunk some of the most common myths about retirement.
Let’s take a look:
Myth No. 1 – You’ll be bored
This is a concern for many soon-to-be-retirees. You spent decades sticking to a routine of waking up early and going to work. It’s only logical to think there might be some boredom now that you’re retired.
The reality, though, is your golden years will likely be filled with volunteering, hobbies, family events, and travel. If these activities aren’t enough to keep your calendar booked, then you may want to consider getting a part-time job or even starting a business.
Myths No. 2 – Retirement is easy
Not exactly. As you can see in this article from US News, there is an adjustment phase retirees must go through before feeling comfortable.
What can you do to settle into a new routine? We recommend coming up with a plan for how to spend your time during these years. The more things you can have in place ahead of time, the less difficult the adjustment phase will be.
Myth No. 3 – Lower taxes
Most retirees rely on a nest egg they built during their working years. That said, you probably won’t be receiving regular paychecks anymore. So it makes sense to assume your taxes will be lower, right?
Not necessarily. It’s common for older Americans to have fewer federal deductions and dependents to claim. In turn, this could mean that a greater percentage of your income goes to the government.
Myth No. 4 – Social Security will cover your expenses
For years, you noticed that a portion of your paycheck went to Social Security. Now that you’re retired, it’s time to tap into those benefits. Here’s the thing: Social Security benefits were never meant to be a person’s primary source of money in retirement.
We can even take it a step further and say these benefits don’t do much in terms of supplementing pensions or investment funds. So don’t fall into the trap of assuming that Social Security will handle expenses during retirement. Be sure to check out a recent post as we explain everything you need to know about Social Security benefits before you retire.
Myth No. 5 – You will struggle to pay the bills
Some financial advisors recommend saving 70 percent of our final income to retire comfortably. Simply put, that’s an unrealistic goal. Instead, the focus should be on eliminating mortgage and debt payments before retirement.
By subtracting those expenses, you can get away with significantly less income during your golden years.
Myth No. 6 – You can put off planning for retirement
Fewer Americans are putting money in a retirement fund than ever before. The common thought seems to be, “I just can’t afford to do that right now, so I’ll put more in later.” Unfortunately, many people don’t understand the concept of compound interest.
The earlier you start planning for retirement, the better. Not to mention, you should never rely on catch-up strategies.
Myth No. 7 – Stocks should be a significant part of your portfolio
You have considered yourself a savvy investor for years. Thanks to a combination of professional guidance and some luck, perhaps you hit a home run with several stocks. You’re planning to rely on stocks during retirement as well.
The Tactical Wealth team advises against this strategy. For one thing, the stock market is volatile and unpredictable. Do you really want to spend your golden years stressing over that roller coaster?
We’re guessing not. As an alternative, we recommend learning more about our Fixed Income Fund. This fund generates consistent, stable income by issuing or purchasing mortgage and trust deed loans according to strict underwriting criteria with a maximum Loan-to-Value ratio of 70 percent.
We are proud to say that our investors enjoy steady and high returns on their notes without having to worry about stock market crashes. When it comes to high return investments, Tactical Wealth has you covered with our proven strategic income fund.
Get started establishing a diversified investment portfolio.