Your retirement will probably be the most important financial goal you will face in your life. If all goes well, you may need to cover decades living expenses from your savings. In addition to these daily costs, medical costs tend to be higher for older people than younger ones, so you need to take that into account.

Planning for retirement is hard enough, but when you add misconceptions to the mix it gets even harder. To improve your chances of building up enough retirement nest egg, let’s get rid of these four retirement myths that might be holding you back. With them out of your way, you’ll find yourself in a much better place to craft and execute a plan that can get you from where you are now to a successful retirement.

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1. Social security will cover a good part of your costs

The average monthly Social Security check for a retiree is $ 1,546.80. Of that money, most people get $ 148.50 deducted for their Medicare Part B premiums, leaving only $ 1,398.30 to cover other costs (including any other Medicare premiums). If you have a “My Social Security” account and your personalized quote says you will receive more than that, be sure to read the fine print on this statement.

There are several reasons why this number may be more aggressive than what you will actually receive. The main one is that the main projection of Social Security is based on the fact that you work until your full retirement age and earn roughly the same every year by then. The most common age to start receiving Social Security retirement benefits is 62, which can reduce your benefits by up to 30% from that number.

2. You can worry about saving for your retirement later

The earlier you start investing for your retirement, the easier and cheaper it is to do so. The more time you have available, the less you have to exhaust yourself each month to achieve the same goal. In addition to having more months to spread your investments, the longer the investment period, the more you can leave the composition – instead of your investments – do the heavy lifting for you.

What difference can it make? The table below shows how much you need to save each month to reach a nest egg of $ 500,000 for your retirement, depending on the number of years you have to save and the returns you earn along the way.

Years to go

10% annual return

8% annual return

6% annual return

4% annual return

45

$ 47.70

$ 94.80

$ 181.43

$ 331.25

40

$ 79.07

$ 143.23

$ 251.07

$ 423.03

35

$ 131.70

$ 217.98

$ 350.95

$ 547.21

30

$ 221.20

$ 335.49

$ 497.76

$ 720.41

25

$ 376.84

$ 525.75

$ 721.51

$ 972.52

20

$ 658.45

$ 848.87

$ 1,082.16

$ 1,363.24

Table by author.

Start early enough, and it’s almost trivially easy to raise a nest egg of half a million dollars. Wait until you are mid-career to start, and it gets a lot harder.

3. If you run out, you can always work a few more years

Man with empty pockets.

Image source: Getty Images.

One of the main reasons people start taking Social Security at 62 despite their benefit cuts is that they need start collecting their benefits at that age to make ends meet. According to the Bureau of Labor Statistics, employment levels begin to decline after about age 54, with a dramatic drop after age 64.

Part of that drop may be because people are saving enough to get out of the wildfire sooner, but much of it is due to factors beyond an employee’s control. Disability rates tend to increase with age, for example, which can make it more difficult to get or keep a job. Also, if you are laid off as you get older, it may be more difficult for you to find another job that pays as well as the one you left, making it harder to save more for retirement.

4. You can use a reverse mortgage to cover your retirement costs

In theory, reverse mortgages It might seem like a smart way to cover your retirement costs, but in practice, these are often minefields of “traps” and costly fees. For example, assembly costs can be as high as 2% of the value of your home, and that’s money you won’t get back. On top of that, mortgage insurance is usually required for reverse mortgages, which is an ongoing cost that doesn’t come right out of your pocket.

Plus, loan limits are set based on your age and the equity in your home. The younger you are, the less likely you are to be approved because the lender wants to protect his interest in the house. Since interest builds up over time, the longer you might have the mortgage open, the higher the compound can be, hence the lower limits for younger borrowers. Therefore, you can’t really count on a reverse mortgage to cover a significant portion of your retirement costs.

Start now to maximize your chances of a comfortable retirement

If your retirement plans ask for more than just swinging on the porch and watching the world go by, then your best way to make it happen is to start right now. The longer you wait, the harder the hill you will have to climb.

If you’ve been held back by believing these four myths about your retirement, then there’s no better day than today to crush these myths and start making a better plan for the type of retirement you are. hoped.

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