Retirement planning comes with a lot of advice—some of it helpful, some outdated, and some just plain wrong. That’s how retirement myths get started—and believing them can lead to stress, higher taxes, and financial surprises.
The truth? A strong retirement plan isn’t just about saving—it’s about knowing how to use your money wisely once you get there. In this article, we’re breaking down six of the most common retirement myths—and how a smart plan helps you avoid them so you can retire with more clarity and confidence.
Retirement Myth #1: “I Can’t Retire Until I’m 65”
Why It’s a Myth:
Many people assume that 65 is the “official” retirement age. While that’s when Medicare eligibility begins, there’s no rule that says you must wait until then to retire.
The Reality:
- You can retire earlier or later depending on your income strategy, healthcare planning, and lifestyle goals.
- Social Security benefits can start at 62—but waiting until 70 increases your monthly payments.
- Many retirees continue working part-time—not out of necessity, but for purpose and fulfillment.
How Smart Planning Helps:
A retirement plan built around your goals (not just your age) factors in your income sources, investment strategy, and projected expenses to give you more freedom to retire on your terms.
Retirement Myth #2: “I’ll Spend Less in Retirement”
Why It’s a Myth:
Many retirees spend more—especially early on. Travel, hobbies, home improvements, and healthcare can add up quickly.
The Reality:
- Spending often spikes in the first 5–10 years of retirement.
- Categorizing expenses—essentials (housing, insurance), discretionary (travel, hobbies), and legacy (charitable giving, family)—gives a clearer picture.
- Inflation keeps pushing costs up, so today’s dollar won’t go as far tomorrow.
How Smart Planning Helps:
A smart plan projects spending by category, adjusts for inflation, and creates flexible withdrawal strategies that help ensure you have enough for both needs and wants.
Retirement Myth #3: “Taxes Will Be Lower in Retirement”
Why It’s a Myth:
Retirement doesn’t always mean lower income—or lower taxes. Required withdrawals, investment gains, and Social Security taxes can all add up.
The Reality:
- RMDs from 401(k)s and IRAs may bump you into a higher tax bracket.
- Up to 85% of your Social Security benefits can be taxable, depending on income.
- Capital gains can trigger unexpected tax liabilities.
How Smart Planning Helps:
With the right plan, you can use strategies like Roth conversions*, managing RMDs, and balancing withdrawal sources to help reduce taxes and keep more of your retirement income.
Retirement Myth #4: “Retirement Investing Is All About Reducing Risk”
Why It’s a Myth:
Shifting entirely to low-risk investments may feel safe—but it can expose you to longevity risk (outliving your money).
The Reality:
- Being too conservative may not keep up with inflation.
- You need investments that generate income and provide growth.
- Stability doesn’t mean eliminating all risk—it means managing the right risk.
How Smart Planning Helps:
We design income-focused portfolios that still include growth to maintain purchasing power and protect long-term security.
Retirement Myth #5: “Medicare Will Cover All My Healthcare Expenses”
Why It’s a Myth:
Medicare covers a lot—but not everything. Long-term care, dental, vision, and private specialists often fall outside its scope.
The Reality:
- Long-term care can exceed $100,000 per year.
- Many retirees purchase Medigap or Advantage plans to fill the gaps.
- Private care and concierge medicine are typically not covered.
How Smart Planning Helps:
We help forecast future medical costs, review supplemental insurance options, and build in long-term care coverage—so you’re prepared for what Medicare won’t cover.
Retirement Myth #6: “Retirement Is All About Finances”
Why It’s a Myth:
Having enough money is important—but it’s not the whole story. Fulfillment, purpose, and connection matter just as much.
The Reality:
- Health, relationships, and meaningful activities drive happiness.
- Some retirees struggle with loss of identity or structure.
- Planning your time is just as important as planning your budget.
How Smart Planning Helps:
A great plan gives you the resources and freedom to focus on what really matters—travel, family, volunteering, or simply living on your terms.
A Smarter Approach to Retirement
Retirement is about so much more than hitting a savings target—it’s about making smart decisions that ensure financial freedom, flexibility, and personal fulfillment. Avoiding these retirement myths and implementing a well-rounded plan can help you retire with confidence and clarity.
Ready to create a retirement plan that works for you? Let’s talk!
*Converting to a Roth IRA creates taxable income, which could increase your tax bill, reduce certain tax benefits, and raise your Medicare premiums or taxes on Social Security. We’ll help you plan ahead to manage these impacts.
Josh Whelan
CFP®, CLU®, ChFC®
Partner, Financial Advisor
About the Author
Josh sees his profession as a calling, not just a career. His motive for pursing financial planning was very personal. While working on a degree in marriage and family counseling, Josh’s father was diagnosed with multiple sclerosis. Josh decided then and there to change career paths to help his family prepare for an uncertain financial future. Financial planning became his path to serving others.
The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.
