There are many retirement investment myths that some workers incorporate into their financial planning – concepts that need to be removed from an investor’s mindset if he or she wants to get on the road to a secure retirement. Compound these notions with the difficulty of making money and preserving it in today’s uncertain economy, and you may find yourself in financial ruin, despite your best efforts:
401Ks are the best investment venues for retirement. Although these savings plans for seniors do have their benefits, you can get more of your balance (and potentially, a larger one) if you sign up for an IRA. IRAs come with lower fees and more investment options, making these good ways to buffer your money against investment loss through better diversification. If you have an IRA, you should invest enough money to get the employer match for your contributions, and then max these out when you have cash to spare. After maximizing your IRA contributions, you can then contribute larger amounts to your 401K.
You can live on Social Security benefits. The program wasn’t designed to solely support a retiree in his or her golden years. Rather, it was built to add to what a senior receives from his pension and other savings tools for retirement. Although you’ll probably still receive your benefits when you quit the workforce, they’re hardly going to amount to much when you compare them to your retirement expenses.
You can’t retire – ever. Many seniors are considering working part-time or full-time for as long as they can; possibly until they pass on. Chances of this happening are rare, because of factors such as disability, job loss, and other reasons that can stop a senior from continuing to work or re-entering the job market. For those nearing retirement and considering not retiring, try to reconsider how you define retirement. You can also think about changing your lifestyle when you retire, or change your existing financial strategies. Just remember to steer clear of retirement investing myths when you do so.