{"id":171236,"date":"2025-12-07T00:36:16","date_gmt":"2025-12-07T00:36:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/171236\/"},"modified":"2025-12-07T00:36:16","modified_gmt":"2025-12-07T00:36:16","slug":"5-retirement-myths-that-could-cost-you-100000","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/171236\/","title":{"rendered":"5 Retirement Myths That Could Cost You $100,000"},"content":{"rendered":"\n

Planning for retirement<\/a> is supposed to bring peace of mind. You set aside money in your 401(k)<\/a>, you pay into Social Security, and you trust that Medicare will be there when you need it. But even careful savers can fall prey to costly misconceptions that quietly chip away at their future income.<\/p>\n

Read More: How Far $1.5 Million in Retirement Savings Plus Social Security Goes in Every State<\/a><\/p>\n

Find Out: 5 Clever Ways Retirees Are Earning Up To $1K Per Month From Home<\/a><\/p>\n

According to Lisa Cummings, estate planning attorney and executive vice president at Cummings & Cummings Law<\/a>, a handful of retirement myths can cost retirees hundreds of thousands of dollars over time. From taking Social Security too early to misunderstanding Medicare\u2019s limits, she explains the most common missteps she sees, and how to avoid them.<\/a><\/p>\n

\u201cI think the biggest myth is, \u2018I\u2019m tired of working, I\u2019ll just start drawing my Social Security at age 62,’\u201d said Cummings. \u201cBy taking that early payment, they\u2019re locking themselves into a lower monthly benefit for the rest of their lives.\u201d<\/p>\n

She explained that claiming before full retirement age<\/a> \u2014 which is 67 for anyone born in 1960 or later \u2014 reduces monthly benefits and can trigger earnings limits.<\/p>\n

\u201cUntil an individual reaches normal retirement age, Social Security limits the amount of income they can earn while receiving benefits,\u201d she said. \u201cIf they earn more than that limit, their Social Security stops.\u201d<\/p>\n

The difference adds up quickly and can cost retirees anything between $120,000 and $300,000 over their lifetime. She advises retirees to wait until the normal retirement age to start collecting Social Security.\u00a0<\/a><\/p>\n

Discover Next: I\u2019m a Retired Boomer: 3 Things I Wish I Had Done Differently To Better Prepare For Retirement Longevity<\/a><\/p>\n

The \u201c4% rule\u201d is often treated as a hard and fast guideline, but Cummings said it was only ever meant as a rough estimate.<\/p>\n

\u201cIt\u2019s not built in for market fluctuations,\u201d said Cummings. \u201cPretend you get through ten years of high inflation \u2014 your purchasing power is going to drop.\u201d<\/p>\n

She recommends retirees adjust their withdrawals to keep in line with inflation<\/a> and market changes and annually monitor their portfolios so they understand where their finances stand.<\/p>\n

When it comes to fees, not all plans are created equal, said Cummings. Some mutual funds<\/a> might charge 1% of the total investment in the fund \u2014 or more. Most 401(k) plans, by comparison, only charge a .5% fee. That difference can add up to major losses over time.<\/p>\n

\u201cEven a difference of 1% annually could reduce a nest egg by up to $100,000 over a period of 25 years,\u201d she said.<\/p>\n

Her advice: Compare mutual funds that invest in the same types of assets. \u201cLook over a 5- to 10-year period to see how those funds performed, and also compare their investment fee ratios,\u201d she said. \u201cThat gives you a better picture of whether that fee is justified.\u201d<\/p>\n

Many retirees think that so long as they enroll in Medicare Part B<\/a> once they hit 65, they won\u2019t end up facing penalties. This is inaccurate, said Cummings, who noted retirees have a narrow six-month window \u2014 three months before and after that 65th birthday \u2014 to enroll. Those who miss that window can be subjected to penalties that last a lifetime.<\/p>\n

\u201cThere\u2019s a 10% increase on the standard Part B premium for each 12-month period delayed,\u201d she said. \u201cSo even if the base amount is $185, if you didn\u2019t enroll until age 67, instead of paying $185 a month, you might be paying $224 a month for the rest of your life.\u201d<\/p>\n

The penalties can total thousands over time.<\/p>\n

She emphasized the importance of checking whether your health plan counts as creditable coverage before you turn 65. \u201cAs long as that plan meets the minimum requirements, it\u2019s considered creditable coverage,\u201d she said. \u201cBut COBRA doesn\u2019t count. As soon as you leave your job, you need to get enrolled in Part B pretty quickly.\u201d<\/p>\n

Finally, Cummings said one of the biggest and most expensive misunderstandings is assuming that Medicare will cover long-term care. \u201cThat\u2019s absolutely false,\u201d she said. \u201cMedicare does not pay for long-term care.\u201d<\/p>\n

She recommended looking into long-term care insurance while you\u2019re still in good health. \u201cDetermine if, while you\u2019re in your younger years and still in good health, you can find coverage,\u201d she said. \u201cIt\u2019s something to think about early.\u201d<\/p>\n

More From GOBankingRates<\/p>\n

This article originally appeared on GOBankingRates.com<\/a>: 5 Retirement Myths That Could Cost You $100,000<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Planning for retirement is supposed to bring peace of mind. You set aside money in your 401(k), you…\n","protected":false},"author":2,"featured_media":171237,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,110641,246,110640,12551,111,139,69,244,245,1050],"class_list":{"0":"post-171236","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-cummings-cummings-law","10":"tag-finance","11":"tag-lisa-cummings","12":"tag-medicare","13":"tag-new-zealand","14":"tag-newzealand","15":"tag-nz","16":"tag-personal-finance","17":"tag-personalfinance","18":"tag-social-security"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/171236","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=171236"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/171236\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/171237"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=171236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=171236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=171236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}