Retirement concerns are common now, with more people waiting until they are older to start saving or facing financial emergencies that require removing money from retirement savings. Retirement fears can be frightening, but there are many ways to stop retirement saving from scaring you. In addition to common fears, many people have a retirement plan, but they ruin it by making avoidable mistakes.
If you want to have enough savings for retirement, try to start young and avoid common savings pitfalls by having an emergency fund and by prioritizing your retirement. Although more people are now choosing to work at least part-time after they retire, if you plan carefully, you can make that decision based on what you want to do, not what you financially need to do. First, though, you need to know the truth about five common retirement myths.
1. You need a specific set percentage of your current income to retire comfortably
Although many financial experts suggest that you save enough to retire with at least 80 percent of your current income, there really isn’t a set number. You can certainly get a good idea of how much money you will need by using a Retirement Calculator, but the numbers won’t be perfect. You should calculate your necessary post-retirement income by anticipated costs, not by your current lifestyle. By the time you retire, you may already have paid off your house, and you might even live in a smaller house.
There is also no magic number that will get you set for retirement. Because the worth of money can go down at any point, $800,000 won’t be worth the same when you retire as it is now. So although you may not need a specific amount, you are always better off saving as much as possible. If you save more than you need, that really seems like a good problem to have.