Studies have found that many Americans aren’t on track to meet their retirement goals. In fact, an overwhelming majority has less than $25,000 saved for their golden years. So there are clearly plenty of misconceptions and myths when it comes to retirement.
Just because a majority of Americans have misconceptions about their golden years, it doesn’t mean you should too.
Here are some money myths that can ruin your retirement (and how to avoid them):
“I can make up for my retirement savings later”
It can be tempting to wait until a more ideal time to begin saving for retirement – perhaps you have a large promotion on the horizon, or you’re currently in the midst of paying off a large expense; there are countless reasons to put this off. The truth is that there will never be a completely ideal time to begin saving for retirement; there will always be opportunity costs to consider and other ways to utilize your wealth.
With that in mind, you should realize the power of compound interest and long-term investing. Because your investments can compound over time, a small amount of wealth invested now can be just as powerful as a larger amount invested later. So the ideal time should be as soon as possible because time can be on your side.
“I should wait until the stock market is doing well to invest”
When there is a bear market (a downturn of more than 20%) or heightened volatility, it may seem like a poor time to begin investing for retirement and a good idea to wait until the market is faring better. However, this is also one of the money myths that can ruin retirement.
If you have a long-term perspective on investing, the stock market can be seen as “on sale” during a downturn because of its extreme likelihood of an eventual recovery. Historically, the stock market has always recovered from a bear market and gone on to reach new highs, so in all likelihood; you’re receiving a “discount” by buying in during a downturn.
Want help avoiding money myths that can ruin your retirement?
At LexION Capital, we help our clients ensure a comfortable retirement. Based on your individual goals and needs, we can craft a unique investment portfolio to help you achieve a worry-free retirement. Don’t hesitate to reach out to us to speak with one of fiduciary advisors and learn more today.
