Retirement Retirement Planning

Dave Ramsey Shares 6 Retirement Myths That Could Be Costly (If You Fall for Them)

Don’t fall for these expensive retirement myths.

budget planning
Updated Oct. 31, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Retirement myths are common — but the unfortunate reality is that listening to common retirement myths can derail your financial future and keep you from getting ahead financially.

We explore some common retirement myths Dave Ramsey debunked to help you avoid a financial disaster.

Earn cash back on everyday purchases with this rare account

Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!1

With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!

This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.

Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.

Apply for a Discover Cashback Checking account today

You’ll spend less when you retire

Tomasz Zajda/Adobe small woodwork job

Many people mistakenly assume that they’ll spend less in retirement. Although that’s an admirable goal, it’s difficult for many to do so. 

Some potential expenses you forgot to account for in retirement include medical treatments and growing living expenses due to inflation.

Additionally, you might need to hire help around the house as you age. For example, you might hire someone to clean your gutters if you no longer feel comfortable on a ladder or clean your house when you don’t have the energy to handle it yourself.

Beyond the potential for higher living expenses at home, many retirees envision a retirement filled with travel adventures. If you plan on hitting some bucket-list destinations, you’ll likely spend more than you do now.

Medicare will cover all your healthcare expenses

bongkarn/Adobe doctor showing patient some information

Medicare is a valuable way to tap into affordable health insurance coverage. When you are 65, you can tap into coverage for doctor visits, hospital stays, and medications. But you’ll still have some out-of-pocket health expenses.

For starters, you’ll be on the hook for deductibles. And if you receive care in an assisted living facility or nursing home for more than 100 days, you’ll have to pay for that yourself. 

If you want help covering long-term care expenses in retirement, consider purchasing long-term care insurance now.

You don’t need to invest if you have a pension

Charlize D/peopleimages.com/Adobe hands for planning

If your employer offers a pension, that’s a great place to start your financial stability in retirement. But it’s essential to dive into the numbers to determine how much income your pension will provide. 

For some, a pension offers a comfortable living. For others, the pension offered doesn’t give nearly enough income to live on.

For those with meager pensions, investing outside of your pension is critical to building assets you can rely on in retirement.

Earn $200 cash rewards bonus with this incredible card

There's a credit card that's making waves with its amazing bonus and benefits. The Wells Fargo Active Cash® Card(Rates and fees) has no annual fee and you can earn $200 after spending $500 in purchases in the first 3 months.

The Active Cash Card puts cash back into your wallet. Cardholders can earn unlimited 2% cash rewards on purchases — easy! That's one of the best cash rewards options available.

This card also offers an intro APR of 0% for 12 months from account opening on purchases and qualifying balance transfers (then 19.74%, 24.74%, or 29.74% Variable). Which is great for someone who wants a break from high interest rates, while still earning rewards.

The best part? There's no annual fee.

Click here to apply now.

You can live off your Social Security income

Azee Jacobs/peopleimages.com/Adobe senior couple signing a contract

Many retirees assume they can live entirely off their Social Security check. Unfortunately, the amount you think you’ll receive in retirement from Social Security might be significantly less than what you’ll get.

As of 2024, the average retiree receives $1,918 monthly from Social Security. That works out to around $23,000 per year, which is often not enough for retirees to get by on.

It’s important to build retirement assets outside of your Social Security income. Otherwise, you could get stuck barely scraping by.

Investing your 401(k) match is enough

wutzkoh/Adobe financial planning graph

If you have an employer that offers a 401(k) match, maxing out that matching opportunity is a good place to start. But depending on your situation, simply hitting your employer’s matching percentage might not be enough to build a substantial retirement account.

Instead of only looking at your employer match, take some time to determine how much you’ll need in an investment account to afford a comfortable retirement. From there, build out an investment portfolio to suit your long-term goals.

You can work through retirement

pikselstock/Adobe senior female pottery artist at studio

Many prospective retirees plan to work beyond the traditional retirement age of 65. Working into your retirement years could allow you to cover your expenses and let your retirement nest egg grow for a few more years.

However, many reaching the traditional retirement age are unable or unwilling to work. Almost 75% of retirees plan on working in retirement, yet only 30% work for pay.

Your employer might lay you off during an economic downturn, derailing your plans. Or you might not find a part-time job that suits your skills and retirement schedule. Or your health might not allow you to keep working.

Even if you want to work in retirement, it’s a good idea to save enough that you can retire when you reach retirement age.

Bottom line

Syda Productions/Adobe senior man on sail boat

Saving for retirement is a significant financial journey. Although many myths surround the retirement savings process, it’s important to block out the noise and stick to what works best.

Throughout your working years, do your best to increase your income, lower your expenses, and invest the difference into retirement accounts for a bright financial future.

Lucrative, Flat-Rate Cash Rewards

5.0
info

Wells Fargo Active Cash® Card

Current Offer

$200 cash rewards bonus after spending $500 in purchases in the first 3 months

Annual Fee

$0

Rewards Rate

Earn unlimited 2% cash rewards on purchases

Benefits and Drawbacks
Card Details


Author Details

Sarah Sharkey

Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make more informed decisions. She covers mortgages, insurance, money management, travel, and more.