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5 Assumptions About Retirement: True Or False?

Retirement Plan

Have you just joined the work force? it may the right time to start saving for your future. why you ask? because saving a little now can help you guarantee a secured future.But Many people have various assumptions about retirement.Which stocks should i invest in?Should i save in a separate account?these are some of the common assumptions people have about retirement and you should clear them up before its too late:

1) Inflation is no longer a worry
Hopefully.Some people have declared that inflation is on the decline, and now actually worry about the cost of living.In the previous year, the average consumer price index went up barely 1 percent. But remember the 1970’s and 1980’s, when inflation routinely came in at 5 percent or more? If you retire at age 66, and expect to live another 20 years, $100 will then be worth only about $64 today, or maybe less.

2) Social Security will be there for you
TRUE. The Social Security system is sound, just the way it is, for another two decades Many workers in America have lost faith in Social Security, thinking the system will fail thus them of benefits. . Yes, lawmakers may make some modest cuts to extend the system. Or, if nothing gets done, there could be deeper cuts later on.

3) You can always keep working
A Big Risk. Many baby boomers express an interest in working after they retire usually as a consultant or in a part-time job. This pans out for many people, especially those who are able to keep options open with their old company. But the fact is, only a small fraction of retired people are actually working. Why the discrepancy? Jobs are not that easy to get for people over 65, and as we hit our 70’s we may find that we don’t have the interest or the stamina to continue in the labor force.

4) I’ll Be Married When I Retire
We have all heard the statistics that 50% of first marriages end in divorce, and the numbers are even higher for second and third marriages. Research at Bowling Green State University, with about one in every four divorces (25%) occurring to people over the age of 50 Divorce can wreak havoc on the retirement plan of married couples, as assets now need to be divided.

5) You can live on less money
You don’t have to be Einstein to figure out that you will have less money when you have retired.The good news is that you need less money. You will likely pay lower taxes and won’t be subject to the payroll tax. Plus your kids will be big enough to support themselves.

So the best thing to do right now is get saving so that your future self will thank you for it.

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