8 Common Myths About Retirement
8 Common Myths About Retirement That Could Cost You Later (And What You Should Know Instead)
When you picture retirement, you might imagine relaxing beach days, more time with family, and finally doing things on your terms. But behind the dream is a reality that requires smart planning—and the sooner, the better.
The problem? A lot of people are relying on outdated assumptions or half-true myths about what retirement will actually look like. These misconceptions can leave you unprepared, overspending, or paying more in taxes than you need to.
Let’s set the record straight. Here are 8 common retirement myths—and what you really need to know instead.
Myth #1: Your living costs will be less in retirement.
You might expect your expenses to go down in retirement—but many people find the opposite. While you may pay off your mortgage or car, other costs—like groceries, utilities, insurance, and health care—often go up. Inflation eats into purchasing power over time, and lifestyle spending like travel, hobbies, or home projects can add up quickly.
And don’t forget: you may lose tax deductions (like dependents or mortgage interest), and your taxes could rise over time. The truth? You need a retirement budget based on reality, not wishful thinking.
Myth #2: Social Security will cover all your expenses.
Social Security was never meant to fully fund your retirement. On average, it replaces only about 37% of your past earnings—and over a third of retirees receive less than they expected.
Plus, looming changes may reduce future benefits. Without additional savings or income sources, a Social Security-only retirement could fall far short.
Myth #3: Medicare will cover all your medical bills.
Medicare is a great start—but it’s not free and it’s definitely not comprehensive. You’ll still pay premiums, co-pays, deductibles, and may need extra coverage for dental, vision, prescriptions, or long-term care.
Options like Health Savings Accounts (HSAs), long-term care insurance, and a personalized Medicare plan can help fill in the gaps.
As Greatstone co-founder Autumn Ruch says:
“Medicare might seem like a maze, but finding the right people to help you navigate it is key.”
Myth #4: You can work as long as you want to.
It’s great to love your job, but life happens. Health issues, caregiving responsibilities, or job market shifts can force you to retire earlier than planned. In fact, 64% of retirees left the workforce sooner than they expected.
Build your plan as if early retirement is possible—that way, you’re protected even if life throws a curveball.
Myth #5: You’ll pay less in taxes when you retire.
Not always. Withdrawals from tax-deferred accounts like 401(k)s and IRAs count as ordinary income—which could bump you into a higher tax bracket, especially once Required Minimum Distributions (RMDs) kick in.
Smart retirement planning includes diversifying your tax exposure and planning your withdrawals strategically to reduce your overall tax burden.
Myth #6: You should always stay in the lowest possible tax bracket.
It sounds smart—but isn’t always efficient. Sometimes paying a bit more in taxes today can save you much more in the future.
For example, converting part of a traditional IRA to a Roth in a lower-income year may reduce future RMDs and taxable income. Retirement tax planning isn’t about the lowest bracket—it’s about the best long-term result.
Myth #7: You can just wait to start saving for retirement.
This one’s a heartbreaker. The earlier you start, the more time your money has to grow. For example, every $1 invested at age 20 could become $88 by retirement. Wait until age 30? That same dollar might only grow to $23.
There’s no perfect time to start—but the worst time is later. Consistency is key.
Myth #8: You don’t need help with retirement planning.
Retirement planning is more than picking a number or buying a few investments. It’s about coordinating income, taxes, health care, estate planning, and inflation—while adjusting as life changes.
Having a trusted advisor means you’re not just guessing. You’re informed, prepared, and supported with strategies tailored to your life and goals.
Final Thoughts
Retirement doesn’t come with a do-over. By uncovering these myths now, you can create a retirement plan that actually works—one that’s based on facts, not assumptions. Check out our free resources like our Retirement Timeline and Retirement Goals Workbook.
