Don’t be in the back-seat when it comes to your retirement: Part 2
Know the myths and facts surrounding retirement.
To reduce confusion about retirement it is important to separate fact from fiction. The previous article in this series highlighted four myths about retirement. This article will dispel four additional myths that will help you stay in the drivers-seat of your retirement:
- Myth: I don’t need to save for my retirement until I’m older.
Fact: The bottom line is that the sooner you can start saving for retirement the better, due to compounding interest. You will earn interest on the money you save plus the interest you have accumulated!
(Tip: Per the U.S. Department of Labor, “For every 10 years you delay before starting to save for retirement, you will need to save three times as much each month to catch up.”)
- Myth: I am too old to start saving for retirement.
Fact: It is never too late to start saving for retirement. Download the Top 10 Ways to Prepare for Retirement publication.
- Myth: My expenses will decrease when I retire.
Fact: It is difficult to predict the future. Will you have extensive travel plans for retirement, and if yes, what will the extra costs be? Will you experience unanticipated health issues? Will you own a home with the mortgage paid in full? Will you need home repairs or modifications?
(Tip: Per homeadvisor.com, the average cost nationally for a home modification due to a disability was $6,244.00.)
- Myth: I don’t really understand how my retirement plan/investments work and I don’t want to embarrass myself, so I think it’s best to not ask any questions.
Fact: It’s never too early or too late to ask questions about your retirement plan/investments. Remember, this is your money. For tips on how to ask questions or what to do if you run into problems visit the U.S. Securities and Exchange Commission.
For additional information on investing, including investment products, calculators and worksheets visit investor.gov. For tips on how to find a reputable financial advisor visit the Consumer Financial Protection Bureau.
Michigan State University Extension has released a new toolkit for homeowners who are experiencing or have previously experienced foreclosure. This toolkit will equip these individuals and families with tools to help them recover their financial stability, in the case that a recovery of their home is not possible. The toolkit is available to download free at MIMoneyHealth.org.
For a variety of financial resources, including how to assess your financial health visit Michigan State University Extension. In addition, Michigan State University Extension offers money management and homeownership classes. For more information about classes offered in your area visit MI Money Health.