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Do you think you’re prepared for retirement? Do you have enough savings to get you through your retirement years? Many people have false beliefs about this stage of their lives, which is why many people aren’t as prepared as they think. Here are five common retirement myths and the reasons why they’re not true.

#1: I’ll Spend Less in Retirement

A lot of people believe their expenses will go down when they retire, but it’s not true. In fact, most people spend more. When you have more time on your hands, you’ll find more ways to spend money. At a minimum, you should plan for 100% of your living expenses. But a lot of the times, you should account for 120% or 140% of your living expenses.

#2: I’m Going to Work Forever

While some people can delay their retirement and work for longer, it’s not always realistic. According to the Social Security Administration, the following is true:

• 70% of retirees end up retiring before they turn 65.
• More than 1 in 4 of today’s twenty-year-olds will become disabled before they turn 67.

Thinking that you’re going to work until you die is never a good plan, which is why you should start saving as soon as possible. It’s never too late to put together a financial plan.

#3: Medicare Will be Cheap and Will Cover Everything

When it comes to retirement, healthcare is the “elephant in the room.” The cost of healthcare has gone up tremendously, and there’s no way to know how it will be in the next 5, 10, or 20 years. Medicare doesn’t cover everything. In fact, here are some things that a Medicare plan doesn’t cover:

• Dental exams
• Eye exams
• Hearing aids

That’s why you need some kind of supplemental coverage (such as Medigap or Medicare Advantage). You need to go into retirement with your eyes open, and you need to realize that not every healthcare cost will go away.

#4: My Social Security Probably Won’t Last

If we stay on the exact same course and don’t make any changes, Social Security will have to be reduced after a significant number of years. So while there is some truth to this statement, it’s a huge myth. Social Security is a big program on which many people depend, so it’s not just going to go away. Full benefits will be available until 2035. So if you’re close to or in retirement, it will most likely not affect you. But if you’re younger, things are probably going to change. Even so, Social Security won’t be enough to make it through retirement.

#5: A 4% Withdrawal Will Never Have to be Adjusted

While many people think that a 4% withdrawal will be enough no matter what, it should always be adjusted based on your circumstances. Because of market fluctuations and other factors, you need to evaluate your withdrawal rate every year. Everything is cyclical, so you can’t just “set it and forget it.” You need to continuously update, adjust for inflation, and make sure you’re on track to meeting your financial goals. Corresponding downturns can have a significant impact on your probability for success when you retire, so you need to take it into consideration.

For more advice on how you can plan for retirement, make sure you get in touch with Trevor Shakiba at Shakiba Capital.