Dave Ramsey Says People in Their 60s Need to Stop Believing These 5 Retirement Myths

If you are in your 60s, chances are you're already retired or very close to it. For many people, reaching retirement age is a major milestone. However, some struggle with the transition from a salaried income to a fixed income. Many retirees are living on just Social Security, while others have a combination of income streams.

Regardless of where you stand, it's important to be aware of some common retirement myths so you don't make financial mistakes during your golden years. Here are some examples that Dave Ramsey, a well-known personal finance expert, wants people to know.

Believing Social Security can fully fund retirement

Many people mistakenly believe that having Social Security will be enough to fund their retirement fully. Ramsey cautions against this, saying it's a mistake to rely on Social Security as your sole retirement income. That's because the OASI Trust says it will only be able to fund 77% of Social Security benefits starting in 2033. That means that unless Congress makes major changes, people will have reduced Social Security checks in the future.

Currently, the average Social Security check is just over $2,000. That is not enough to sustain a secure retirement. Ramsey says people should take advantage of workplace retirement plans and other retirement accounts, such as Roth IRAs, in addition to their Social Security income.

Thinking there's a "magic" retirement number you can reach

Though it's good to have a retirement goal, there is no magic retirement number that works for everyone. Ramsey has told people in their 40s and older who have not even started saving for retirement that it's still possible with the right framework. What matters more than having the right number, he says, is developing sustainable, disciplined financial habits that will help you preserve your nest egg for the long haul.

Thinking its ok to have debt in retirement

One of Ramsey's more controversial takes is that he believes people should be completely debt-free before investing in the market. He also encourages retirees to be debt-free, including their mortgage. Though not everyone agrees with this approach, Ramsey explains that having no debt and no mortgage payment in retirement allows retirees to free up valuable cash flow for everyday expenses and unexpected emergencies.

Assuming Medicare will cover all health costs

Although retirees can sign up for Medicare starting at age 65, Medicare may not cover all healthcare costs. In fact, data from Fidelity found that retirees age 65 and above will spend, on average, $172,500 on Healthcare in retirement. That doesn't include nursing home care or specialty care, like a memory Care facility. Because of that, Ramsey also recommends purchasing long-term care insurance. Otherwise, retirees may be surprised at just how much their healthcare will cost in their later years.

Believing you can retire without a solid plan

Many people work hard all their lives and contribute to retirement plans but don't develop a step-by-step plan for how they'll manage their finances in retirement. For example, your withdrawal strategy in retirement can impact your income, which in turn can impact how much you pay in taxes. Additionally, deciding when to take Social Security and whether to delay it to get a bigger check is another important decision people have to make. Without a plan and without comparing options, retirees risk making financial mistakes that can be hard to bounce back from.

Your 60s are a critical time for making significant retirement decisions

Ultimately, your 60s are an important time to make decisions about your retirement plan, withdrawal strategy, and healthcare costs. Once you're in your 60s, there's very little runway left to recover from financial mistakes or to take advantage of compound interest. For that reason, it's important to reassess your savings, take the time to understand your healthcare costs, and make an appointment with a financial advisor if you need a second opinion.

Why people turn to Dave Ramsey for financial advice

Although some people believe that Dave Ramsey is too harsh when he speaks to guests who call into his radio show, others praise him for helping them with the steps necessary to achieve financial independence. Dave Ramsey's company, Ramsey Solutions, now has over 1000 employees and has helped millions of people through their podcast, radio show, books, conferences, and other forms of financial education.

Bottom line

Ultimately, once you're in your 60s, it's more important than ever to avoid money mistakes. After all, once you switch to a fixed income, it can be hard to financially recover from missteps. Ramsey encourages all of his listeners to remain disciplined, learn to stick to a budget, monitor their spending, and work hard to get debt-free so they can retire comfortably.

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