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RETIREMENT MYTHS.
Don't Myth Retirement
American Express thinks you need to re-think what you've
always thought about retirement. And, in order to help you
do just that, AE has released their list of the top
retirement myths held by most Americans.
•Social Security and Pension are enough for a comfortable
retirement.
Social Security and Pensions provide only 40% of
retirement income. The remainder must come from
personal savings, investments, and possibly a
part-time job.
•It takes a million dollars to retire comfortably.
Your real needs will depend on your mix of investments,
savings, part-time work, and other creative initiatives
such as reverse mortgages to provide an income stream.
•Family inheritance is a reliable source of income.
It's risky to count on inheritance because unforeseen
expenses (catastrophic illness, nursing home costs)
could erode your parents money before it can be
passed on to you.
•There are ways to force the government to pay my
medical bills.
A new federal law now governs the time period in which
people who are old and sick can "spend down" their
assets in order to qualify for government assistance.
The law imposes a fine of $25,000 for those who cheat.
•Retirees are all in a lower tax bracket.
Many retirees face additional taxes on income streams
from work, capital gains, and stock dividends.
•Retirement communities provide a lower cost of living.
Do your homework on real estate values, property taxes,
health care costs, and sales tax. Many cities grow into
expensive communities. That sleepy little village where
you vacationed every summer may attract many more
retirees like yourself. That means growth. More city
services, more homes, more schools, more roads.
•Upon retirement my investment strategy should be
conservative.
This could be a mistake. A 20-25 year retirement
life-span will require investments that provide a
hedge against inflation. Also, shifting your
investments may result in taxable capital gains.
•Nursing home costs will be covered by Medicare.
The majority of care provided in nursing homes is
custodial, not medical care. Medicare does not pay
for custodial care. And, if Medicare doesn't pay,
then neither will most Medigap insurance policies.
•Continuing to work will provide an income stream.
Sometimes, even a part-time job can place you in a
higher tax bracket. Your Social Security benefits
could be reduced depending on how much income you
earn, your age, and your filing status.
Take time to discover the truth about these
retirement myths, and your retirement income
should last as long as you do.
Reprinted by Permission From: AgeVenture News Service,
Editor, Dr. David Demko, PhD
http://www.demko.com
[email protected] or [email protected]
