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Life Planning Center > Getting Ready To Retire / Retired
Understanding the Basics
  • Introduction
  • Now That You Have the Time... Will You Have the Money?
  • How Sturdy Is Your Three-Legged Stool?
  • Myths about Retirement Planning
  • Big Picture Preview
  • Basic Guidelines
  • Get a Head Start on Your Retirement Today
  • Retirement Action Steps
  • Five or More Years from Retirement
  • Two Years from Retirement
  • Six Months or Less from Retirement
  • Bridging the Retirement Insurance Gap
  • Company-Sponsored Retiree Medical Coverage

Myths about Retirement Planning

Many people make mistakes in their retirement planning because they believe in one or more myths about retirement.

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Myth #1: "I'll need a fixed-income for only 10 to 15 years." Unless you have a short lease on life, it is better to assume you will be living to at least age 85.

Myth #2: "My living expenses will be lower." Do you expect your lifestyle to drastically change? Besides some commuting expenses and daily lunch money, what else do you plan on cutting out? Consider all the things you'd like to start doing and figure out the costs.

Myth #3: "Social Security will replace a portion of my pre-retirement earnings... and it won't be taxed." The greater your pre-retirement earnings, the less you should count on Social Security. It favors lower wage earners. And, if you have a pension and substantial income-producing assets, there is a strong possibility that 50–85% of your Social Security benefits will be taxed.

Myth #4: "I'll be in a lower tax bracket." Just because you'll have less income doesn't necessarily mean that you'll be taxed at a lower rate. It's important to figure out how much your income will be and then look at the tax tables. It's an essential part of your pre-retirement planning.

Myth #5: "I can wait until I retire to decide how and where I'm going to live." The key is to start planning before you retire. The worst time to make a decision is when you're forced to make one. Having a general idea of where you'd like to live allows you to make the appropriate changes in your retirement strategy. For example, buying property when interest rates are lower can make the difference between you being able to qualify for and maintain a mortgage, or not.

SUGGESTION: If you can, and conditions are right, consider buying property prior to retiring. You may have a better chance of securing a mortgage if you're still working and your income is higher.

Myth #6: "I won't be financially responsible for my parents or children." Don't fool yourself. Take a good look at your family. How are your children financially? Will you have elderly parents dependent on you? Will you be a member of the "sandwich" generation (people taking care of both their children and their parents)?

Myth #7: "My company will continue to provide me with retiree health benefits." Unfortunately, this is not true. More and more companies are looking to scale back or eliminate health benefits for retired employees. Make sure you understand your employer's policies on retired employees.

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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Franklin Mint Federal Credit Union and Mint Wealth Advisors are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Mint Wealth Advisors, and may also be employees of Franklin Mint Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Franklin Mint Federal Credit Union or Mint Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:

Not NCUA Insuredor Any Other Government Agency No Credit Union Guarantee Not Credit Union Deposits May Lose Value

The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: NJ, PA, NY, DE, AZ, MI, FL, MD, TX, VA, GA, NC.



Financial Learning Center content created by TrueBridge, Inc. The information provided is based upon sources and data believed to be accurate and reliable. The content contained herein is intended for information and illustrative purposes only, should not in any way be construed as a personal recommendation, and should be used in conjunction with individual professional advice.

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