Retirement Retirement Planning

8 Costly Myths That Could Derail Your Retirement

For a secure financial future, avoid this bad advice.

By Josh Koebert , Edited by Laura Hohenstein

Updated Oct. 27, 2026

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Your retirement plan may look good on paper, but it might rest on assumptions you haven't tested in real life. That's easy to do when you're planning years ahead and relying on myths that are outdated — or were never true.

These eight myths could delay your retirement or cause you to spend your nest egg too quickly. Here's what to reconsider so you can build your plan on firmer ground.

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My spending will drop when I retire

The truth: Commuting and workplace lunches may go away, but housing, utilities, food, and insurance still need paying for. You'll also likely pay more for new budget categories like travel or hobbies while balancing the rising costs of healthcare, insurance, or property taxes. And since inflation doesn't retire, you'll have to deal with that, too.

Believing this myth can result in an unrealistic budget that doesn't account for new or changing costs. Some bills may decline, but they may not disappear forever.

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Social Security will cover most of my expenses

The truth: It replaces roughly 40% of pre-retirement earnings for a medium earner.

Relying on this benefit alone could leave a recurring gap between income and bills, leading to new debt or cutting back on essentials like prescriptions or home repairs. Instead of comparing the average Social Security check with a smaller retirement budget, get a personalized estimate of your Social Security benefits based on your earnings history and re-examine myth #1.

Social Security is going broke, so I should expect nothing

The truth: The 2026 trustees project that Social Security's retirement and survivors trust fund reserves will be depleted in the fourth quarter of 2032.

Believing this myth can distort savings or claiming decisions, but assuming full scheduled benefits can be just as harmful. Taking a careful approach and planning for decreases (not complete elimination) is a more balanced way to plan ahead. Test a reduced-benefit scenario to see how it would look for your unique budgetary needs.

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Healthcare will be free with Medicare

The truth: Medicare Part A, the hospital benefit, is premium-free for most eligible people. But premium-free isn't cost-free, as there are still copays and deductibles in some situations. Part B, which covers doctor's visits and outpatient treatment, carries a monthly premium; Part D, for prescription drug coverage, may carry an additional monthly premium, depending on how you receive your coverage.

Between out-of-pocket costs and the premiums for coverage, expect to keep healthcare as a substantial part of your budget in retirement. Original Medicare generally doesn't cover routine vision care, most dental care, or hearing aids — vital elements of staying healthy as you age. Also, Medicare doesn't cover custodial long-term care, leaving seniors to potentially foot very big bills in later retirement.

Early Social Security claims get corrected at full retirement age

The truth: For someone whose full retirement age is 67, claiming at 62 generally decreases the monthly benefit payment by about 30%.

The early-claim reduction generally lasts for life; it does not automatically disappear at full retirement age. However, SSA recalculates benefits at full retirement age to credit months when benefits were reduced or withheld because of excess earnings. Claiming early may be the right move for you, but it's one with a lasting trade-off.

I won't owe taxes once I stop working

The truth: Traditional IRA withdrawals are generally fully or partially taxable, while qualified Roth IRA distributions can be tax-free. Social Security benefits may also be taxable, depending on income and filing status.

Your gross retirement income isn't necessarily the amount available to spend after taxes, and there's a difference in how the federal and state governments treat retirement earnings. Account for taxes when estimating withdrawals needed to cover the budget. Without proper withholding, you may end up paying the IRS, your state tax agency, or both.

Retirement News: Almost 80% of Americans fear a retirement age increase — here’s the real reason why

If I'm behind, I'll just work longer

The truth: Extra working years can help repair some of a savings shortfall, but these years aren't guaranteed. The EBRI's 2026 Retirement Confidence Survey found a median expected retirement age of 65 among workers, versus a median actual retirement age of 62 among retirees. Nearly half of retirees in the survey said they retired earlier than planned.

Additional paychecks can fill in the gaps, but should be a possible advantage — not the only fallback. Testing early retirement scenarios can help you see what's likely if your health declines or layoffs cause you to leave the workforce early.

There's a magic savings amount that'll cover most retirements

The truth: The savings target depends on many factors, including spending habits, retirement timing, lifestyle, geographic location, values, debt levels, assets, and other income. Wealth planners and calculators often rely on assumptions about savings rates, investment allocations, and retirement age, but these are just assumptions.

A universal number can help give you something to aim for, but it's not the final word on what it takes to retire comfortably. Anyone who says otherwise isn't in a position to give you specific advice about your personal needs and goals.

Bottom line

Most of these myths rest on assumptions about expenses, income, coverage, and control over retirement timing. Others are simply wrong and may lead to financial mistakes.

Even an accurate retirement rule may not fit your plans. Test it against your spending patterns, health outlook, and idea of a comfortable retirement — all of which may differ significantly from someone else's. Retirement is too important to base on advice that overlooks those differences.

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