A lot of people nearing their retirement believe that they have everything figured out. However, they find retirement to be very different from what they’d pictured. Here are 5 things that you thought were true about retirement but aren’t.
When you plan to retire matters
Most people believe that they will work until 70 years of age or retire after 65. However, most of the full-time employees leave their jobs before turning 65 due to health issues. Therefore, you won’t necessarily retire at the same age you plan and thus, need to plan that scenario as well.
You know exactly what you’ll do post retirement
Many people choose to stay engaged in the community even after their retirement. Therefore, you can either opt for volunteering or can take up a part-time job to earn some extra cash.
You only need your income
The weak economy and inflation is making things more expensive by the day. Therefore, the belief that one can survive on their income alone is far-reaching. In order to get through your retirement well, you must invest to earn a returns.
You’ll have less expenses
It is common to assume that you’ll have less expenses once you grow older as you anticipate having less bills such as a mortgage payment. However, retirees are ending up spending more on leisure activities as they have a lot of time on their hands. Some pre-planning needs to be done including prioritizing your expenses.
Insurance will cover everything
Aging can bring a lot of health issues which makes it crucial to be insured. But several issues like dental health and nursing homes are not covered by insurance and can be expensive.
How does new myRA work?
People who haven’t take much for the retirement can opt for a myRA account and start by depositing as little as $25 in the account. You can continue saving a small amount from your paycheck. After a certain amount, you will be required to roll the account over to a traditional IRA.
How can it help?
myRA is a good start for many people but won’t end up helping much as the returns from it aren’t guaranteed. Even the amount that one may earn over a period of time won’t be enough to cover all the years of retirement.
Is traditional IRA just as good?
A traditional IRA requires an annual deposit which can be continued for as long as you want. It also gives a guaranteed and good return that’ll help you sail through your retirement.
Your savings are exempted from tax
The money put into a traditional IRA account is exempted from tax but becomes taxable as soon as you start withdrawing from it. A Roth IRA, on the other hand, will allow you to withdraw money without any taxes.