Helping you earn through partnerships.

Our top priority is to help you learn and earn. Our articles are provided free of charge, and the information found here can help you build wealth for life. We offer an independent perspective on financial services, financial markets, and good practices for personal finance. Our main goal is to help you grow your money.

Wealthy Millionaire helps you earn by recommending services through our carefully vetted list of partnerships. Our research and professional insight were built through years of financial industry experience, and our recommended products are based on an independent analysis of the best service providers in the market. These recommendations are objective; we do not accept special payments to recommend products and services from our partners.

Loan offers that appear on this site are from companies from which Wealthy Millionaire receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). Wealthy Millionaire does not include all lenders or loan offers available in the marketplace.

7 Misconceptions About Retirement You Should Stop Believing

I recall giving my first Toastmasters speech on the importance of saving for retirement. It was actually from a few decades ago, which is difficult to comprehend. I wanted to improve my public speaking skills, you see. My supervisor suggested that I attend these gatherings so that I could practice speaking in front of others. But that’s beside the point. The reason I remember the speech so well is because of a remark made by the person judging my performance. He said that because he and I were still in our twenties, we didn’t need to worry about retirement planning just yet. I didn’t want to dispute with him, but I recall thinking to myself how incorrect he was. Here’s why: (along with some other retirement misconceptions you need to stop believing).

Myth #1: Put Off Thinking About Retirement Until You’re [Whatever] Age

About 20 years have passed since that speech. That man would be so much further ahead right now if he had taken my message more seriously and had begun saving for retirement right then. After all, based on the 6x return of Vanguard’s S&P 500 index fund (VFIAX) over the past 20 years, any dollar he invested in an S&P 500 fund is now worth six dollars. Since I started working part-time as a teenager, I have been putting money away for retirement. Every dollar I saved back then is now worth at least ten times what it was, and it keeps adding to my nest egg.

One of the fallacies that some people erroneously hold to is the idea that you shouldn’t worry about retiring until you reach a particular age. There is never a bad time to start saving. Compared to most individuals, I got started quite early. Despite the fact that I am still rather young, I am almost certainly going to have a decent retirement. When will you begin saving money?

Myth #2: It’s Too Late to Start Saving for Retirement

On the other hand, some of us have never made retirement savings. We believe it is already too late to begin. The typically broke overachiever we frequently write about is one of my pals. Money shouldn’t be an issue because he earns at least $500,000 annually. He has a faster lifestyle, though, and it consumes every penny of his pay.

He has so many adult toys (cars, boats, etc.) that he has amassed debts totaling hundreds of thousands of dollars. Even the millions of dollars he borrowed to pay for his mansion are not included in that. Ideally, he’ll retire with a sizable amount of equity in his home. However, given how frequently he has obtained cash-out refinances, that result isn’t certain either.

Still Possible

Fortunately for him, he is a good earner. He probably has a very promising career ahead of him. He has waited till he is in his 40s to begin retirement. However, he earns enough to swiftly catch up. He just needs to decide to set aside a portion of his large salary. He could even wait until his 50s before starting to save money if his income remains steady. But the risk is bigger the longer he waits.

The life he used to lead in retirement won’t be the same. He will be unable to continue his spendthrift habits, it seems. He should start saving money for retirement, though, as it will be better spent than wasted on his next fast car. After all, every dollar he invests in his retirement now will help him live the lifestyle he is accustomed to without having to worry about money.

Myth #3: I Make Too Little to Save for Retirement

We now get to the third misconception. Hearing tales like the one involving my friend can be discouraging. He does earn half a million dollars annually, after all. As long as he slightly curbs his spending inclinations, he should be alright, even if he isn’t a math genius. He earns more than enough to immediately begin investing for his retirement.

However, there are far more people at the other end of the income spectrum. Those who earn enough to cover their basic expenses but not enough to contribute significantly to their retirement funds. Over time, we have taught ourselves to survive on less. Therefore, we believe that if we retire, we can also live on less. Above all, though, it is challenging to save money for retirement when there is little left over from your paycheck after all necessary costs have been paid.

However, there is some good news. You won’t need to save as much money as my free-spirited friend does if you already lead a reasonably frugal, non-luxury lifestyle. He will experience a major shock when he finds he cannot afford his pricey possessions and luxurious vacations. Those who have even modest retirement savings should be able to maintain their standard of living in the meanwhile.



Remember Help Is Available

Additionally, a small nest egg means that government entitlement programs will contribute more to our budget than high earners, which is a negative. We’ll benefit more from programs like Medicare, Medicaid, and Society Security than my friend will, to name a few.

I am aware of persons who rely solely on Social Security. Yes, that certainly doesn’t sound ideal. But even in retirement, these folks have highly respectable and fulfilling lives. They aren’t using the scare tactics that people spread around, like “eating cat food.” These government-sponsored initiatives should provide a big boost if you have worked for more than 40 years.

Myth #4: Social Security Will Vanish

Of fact, the government’s ability to protect us depends on these entitlement programs staying solvent. The Social Security program is experiencing financial difficulties, which is no secret. Numerous analyses have revealed that the program is currently in surplus (according to the plan). It will eventually run out of money, though, so don’t wait too long.

In fact, depending on which news report you most recently heard, the moment when the trust fund runs out of money has been moved forward so many times. If it runs out of money in the next ten years, I won’t be shocked. The situation sounds so bad that many people I know are making retirement plans with the assumption that they won’t receive any Social Security benefits at all.

Social Security Will Continue to Exist

But these worries are unfounded. Yes, there are issues with Social Security. The program is a pay-as-you-go one, though. This indicates that the debt of today is paid for by the wages of today’s workers. There will still be workers contributing to the program that will pay for tomorrow’s commitments when the surplus runs out in the future.

It’s difficult to picture a political leader who would be ready to risk losing all support from retirees by failing to address any issues that would significantly reduce benefits because Social Security is such a vital component of our nation’s retirement system. Could Social Security be severely reduced, if not completely eliminated? Sure. Everything is conceivable. Just incredibly implausible. Imagine the commotion, after all, if the government suddenly chose to withhold every penny you’ve contributed to Social Security over the years. It is, in fact, your money. In order to prevent the program from going bankrupt entirely, they would simply create more money.

Myth #5: The Stock Market Is Too Volatile

Do gloomy predictions prevent you from making investments? Keep them from controlling your life or your financial future. Generally speaking, investing endures throughout time. In the near future, a trend line might appear frightening. Take a step back, though, and observe market performance over several years. The entire scene is altered.

You may get over concerns about a quick market decline by taking a wide strategy. The more you research investing in the stock market, the better you’ll comprehend that the market almost usually bounces back and prospers given enough time.



Recall how I said that some of the money I put into investments when I was a teenager increased tenfold? The pot didn’t increase linearly. Several scares have occurred. My savings were reduced in half during the Dot Com crash. After recovering, it was split in half once more during the Great Recession. The falls were really steep and undoubtedly terrifying. But in reality, all you had to do to succeed was persevere, resist the urge to sell, and wait for the market to rebound.

Myth #6: A Million Dollars Will Work

Millionaire status isn’t what it once was. Sure, it’s still a lot of money. It most certainly does not imply a life where nothing matters how much it costs. Actually, I don’t believe that occurs until you have a net worth of at least $30 million. For other people, the number might be lower, I imagine. But only if you don’t manage your own money or if you continue to work a job that essentially supports your standard of living.

Then why the difference? The cause is related to inflation. In the midst of the Mississippi Bubble in 1719, the word “millionaire” was first used. Around 300 years ago, owning a million dollars did indeed make you extremely wealthy. Inflation gradually reduced the purchasing power of each dollar over time. There are currently thought to be 48.6 millionaires in the globe. Every day, more and more are produced. There will eventually be billions of millionaires on the planet.

Being a millionaire is a wonderful goal to have if you’re thinking about retiring. Calculate quickly. You need funds for 20 years if you retire at 65 and think you’ll live to at least 85. A million dollars in savings only yields $50,000 annually. That’s a respectable amount, but what if an unexpected expense makes you require more? Or suppose you wind up living ten years longer than you anticipated? Being a millionaire will eventually only be regarded as middle class, perhaps even now. To retire comfortably, you’ll probably need more than a cool million.

Myth #7: You Need More Conservative Investments As You Age

Setting your bond percentage at the same level as your age is a common rule of thumb for determining a suitable asset allocation. Various variations on the “age in bonds” concept exist, including “100 – your age in stocks” or other “number – age” scenarios. The general idea behind all of these principles is that you need more “safer” bonds as you become older in order to maintain the stability of your portfolio.

The reason I’m giving this advice is that an older retiree won’t be able to withstand a market crash’s terrible impacts the way I could in my 20s and 30s. It didn’t matter when my savings were slashed in half because I wouldn’t need the money for several more decades. They had enough time to rest. But if those wrecks happened as I’m getting close to retirement, I would have freaked out a lot more. Therefore, after they reach the ages of 50, 55, and 60, many people begin to transfer their assets. They choose a less volatile investment to protect themselves from any significant downturns. Running out of money in retirement is every retiree’s worst worry.

There Is An Alternative

However, research has shown that the moment retirement begins is the time when retirees are most at risk of running out of money. The safest strategy is to be the most cautious at the beginning of retirement and really gently increase stock exposure as you age in order to counteract the effects of inflation over a long retirement and protect against a sudden drop in equity prices.

The majority of generally recognized retirement advice is against this. If you don’t really believe me, I can understand that. But carry out additional research (and some more math). I mean, it’s important enough to look into. After all, if you can continue to generate investment income after retiring, that merely increases your level of financial independence throughout your golden years.


Sadly, I’ve lost contact with the individual who critiqued my Toastmasters speech years ago. I can only hope that he has altered his mind about how early it is to start worrying about retirement. He will soon be in his 40s, so if he hasn’t begun saving for retirement, he may be in for some difficult days.

I would have attempted to counter his claim that day if I could go back in time. He may not have paid attention. Perhaps it wouldn’t have made a difference. However, there was a possibility that I may have improved someone’s retirement trajectory that day. I now strive to make a living by helping others achieve financial success, so I kind of regret missing that opportunity at the time. Nowadays, whenever I hear someone repeating one of these widespread retirement misconceptions, I’ll be pleased to dispel their claims. Likewise, you ought to. It’s up to us to clarify the situation.

Featured Image:  Pixabay @ PICNIC-Foto

Get Money
Saving Tips

Learn how to save and make more money with our exclusive tips and insights that we only share with our private newsletter subscribers.

Privacy Policy