Myths about Social Security and what you need in retirement
Believing that Social Security will go away or that Medicare covers all expenses can affect your retirement. These are the myths you should get out of your mind
When talking about retirement, it is common to hear advice from family, friends or even read posts on social networks that are not always correct. Some of these ideas may seem logical, but they are actually myths that can affect the way a person saves or plans for retirement.
A report from the Center for Retirement Research at Boston College compiled some of the most common mistakes Americans make when thinking about their retirement. These are six of the most important ones.
1. Social Security will no longer exist when I retire
This is probably the most repeated myth. Many people believe that as the program faces financial problems, it will stop paying benefits altogether. The reality is different.
“It seems to me that people are jumping to the conclusion that it's going away,” Luke Delorme, a certified financial planner and author of the Center for Retirement Research report, told USA Today.
If Congress does not make changes before the fund's reserves are exhausted, Social Security would continue to pay about 83% of benefits with the income it receives each year. That is, the program would not disappear overnight.
2. I will never need long-term care
Many people imagine that they will reach old age in good health and will never need help with basic activities, such as bathing, dressing, or preparing food. However, a study?from the Center for Retirement Research shows that more than eight in ten Americans will require some form of long-term care at some point in their lives.
"People don't want to think about it. It's hard to imagine not being able to take care of yourself," said Keith Singer, a certified financial planner.
The problem is that this type of care can cost thousands of dollars a month, so ignoring it can seriously affect your finances in retirement. Just to give you an idea: Nursing homes charge $6,200 a month, on average, according to CareScout; while a home health aide costs about $75,000 a year, Delorme reports.
3. Medicare will pay for that care
Another common mistake is thinking that Medicare will cover all expenses, even if a person needs ongoing assistance. A survey conducted by Nationwide in 2025 revealed that 58% of American adults mistakenly believe that Medicare covers long-term care.
In reality, Medicare only covers certain medical services and some temporary stays in specialized facilities. If a person needs daily help for months or years, they will usually have to pay for that care themselves or have another type of insurance.
4. I need a million dollars to retire
From time to time, studies appear that talk about an “ideal” figure for retirement. While those calculations can serve as a guideline, there is no one amount that works for everyone. It all depends on lifestyle, monthly expenses, where the person lives, and the income they receive from Social Security or other sources.
“Clients are always looking for the magic bullet: You hit $1 million and you retire,” said Dinon Hughes, a certified financial planner.
5. When I retire I should no longer invest
Some people believe that when they stop working, they should also take all their money out of the stock market. However, retirement can last two or even three decades. That means money still needs to grow to cope with inflation and cover future expenses.
For this reason, specialists usually recommend maintaining an investment strategy in accordance with the age and risk profile of each person, instead of completely abandoning investments.
6. In retirement I will hardly pay taxes
It is true that many people have lower income after they retire, but that does not mean they stop paying taxes. For example, withdrawals from traditional 401(k) accounts or an Individual Retirement Account (IRA) may be subject to taxes. Additionally, in some cases, a portion of Social Security benefits may also be taxable.
Planning for retirement isn't just about saving money, it also means understanding how Social Security, Medicare, and the tax rules work for adults in the United States. Although retirement usually brings benefits in many aspects, there are certain ideas rooted in the population that are erroneous and that can affect your financial life.