Shocking Misconceptions That Hinder Your Chances of Retiring Successfully!
One of the most misconceived issues in the realm of retirement that many Americans battle with is the story of retirement finances. It is this misconception that hinders millions of these Americans from having a successful retirement.
This confusion and misinformation regarding the various types of retirement finance options are what is leading to some of the biggest mistakes for potential retirees around the country.
In fact, Nationwide Financial Services recently carried out a survey to document potential retirees regarding their financial retirement options. Detailed below is a list of some of the gravest mistakes that respondent made pertaining to their finance retirement strategies.
Mistake 1- Worrying About Social Security
When quizzed, about 72% of respondents of the survey said that they were worried that their Social Security funds would be depleted during their lifetime. As a matter of fact, analyzing the Social Security and Medicare annual report, it shows that even in the prediction of the trust fund depleting (which is expected to occur in 2032) the payroll taxes that will be directed into the system should be sufficient enough to indefinitely pay for roughly 70% of the benefits promised.
That being said, this widely accepted belief that Social Security will have no money in the near future is one of the reasons why very few individuals spare their time to comprehend the program, and to implement measures that will maximize their benefits.
Additionally, the survey also discovered that a large majority of participants in the survey were misinformed regarding even the most basic of features when it came to Social Security.
In turn, these individuals end up missing out on the opportunity of Social Security.
As a matter of fact, retirement experts say that it is quite usual for them to observe situations whereby a couple loses out on over $200,000 in lifetime benefits due to making poor Social Security decisions.
Mistake 2: Not Being Aware That Social Security Benefits Are for Life
In the survey, over 50% of respondents were not aware that Social Security benefits were for life and indeed, indexed to tackle inflation.
That being said, it is crystal clear that social security is one of the pillars of retirement finance for a large number of individuals. This is because it is a great source of income for millions of individuals.
Evidently, this feature is what makes Social Security be the primary source of income for many people during their retirement years.
Keeping this in mind, it is essential that Social Security benefits be understood and decisions regarding social security are planned effectively.
In fact, one can use an online calculator to make an estimate of the benefits, and even talk to a financial planner to take you through Social Security.
Mistake 3- Being Unaware of the Key Elements That Determine Your Social Security Retirement Benefits
Interestingly, during the survey, a mere one-third of respondents were aware of their full retirement age. This is the age at which an individual can begin benefiting from Social Security without receiving a penalty.
In fact, quite a number of even those that had retired were eligible to receive the full benefits even before they were retired.
Usually, potential retirees tend to overestimate the amount of money that they will receive as benefits.
As a matter of fact, many of them believe that they are entitled to receive about 30% of the benefits.
Additionally, 25% of them believe that the program should be sufficient enough to provide them with enough income to live a comfortable life during retirement, and 55% of them banked on Social Security as their main source of income while they were in retirement.
Mistake 4: Underestimating Problems with Their Health
Last but not least, during the survey, one-quarter of respondents admitted that health problems had made it impossible for them to enjoy their retirement as they had expected.
In fact, around 80% of the retirees further revealed that health problems sprung up in their life sooner than they had anticipated, with an additional 63% saying that their health problems had sprung up more than 5 years than they had predicted while they were in retirement.
That being said, a large number of individuals always enter retirement with the misconception that their Medicare will cater to most if not all of their medical expenses.
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