From Yahoo Finance
3 Money Lies You Should Stop Telling Yourself By Age 40
Business Insider By Mandi Woodruff
Most of us know what we should be doing with our money. But saving and investing and filling out paperwork is hard, so we tend to make excuses to avoid it.
By the time you hit 40, rationalizing away your bad money management habits starts to have a serious impact on your financial future (not to mention age you).
Here are some of the top money lies that you should stop telling yourself by age 40:
1. Debt collectors will stop chasing me once I'm in retirement, so why worry about it?
Think again. Even student loan debt can chase you into retirement. The Treasury Department has been withholding as much as 15% of Social Security benefits from a rapidly growing number of retirees who have fallen behind on federal student loans — five times as many as in 2001.
2. I can definitely get by in retirement with less income than I'm making now.
Leaving the workforce might help you cut costs in some areas — for example, your pricey commute to the office — but you can never underestimate the cost of aging. " Many studies show that some retirees even spend more in retirement than they did when they were working," says Susan Garland, editor of Kiplinger’s Retirement Report. A s the years go by, your health-care costs, house-related maintenance costs, insurance, and property taxes are sure to be on the rise.
3. I can always save more by postponing retirement until my late 60s or early 70s.
" More and more Americans say they plan to pay for retirement by working longer, but in reality many retirees end up quitting sooner than planned," says Greg Burrows, senior vice president for retirement and investor services at The Principal.
One third of American workers said they plan on working past age 65 in a survey by the Employee Benefit Research Institute, but more than 70% of retirees said they actually quit before that milestone.
4. I can always rely on Medicare for my long-term health care needs.
Medicare is an excellent resource for retirees needing health-care support, but here's a wake up call: It doesn't cover all long-term care. Medicare coverage excludes extended nursing home stays, custodial care, or an in-home nurse to help out if you're unable to dress, feed, or bathe yourself.
"Medicare pays for limited nursing-home and home-health care for short periods to provide continuing care after a hospital stay," Garland says. "For example, skilled care in a facility is limited to 100 days. It may be wise to consider long-term care insurance to cover those costs."
5. My nest egg will be safe in a bank account.
Never underestimate the crippling power inflation has over your retirement savings.
"Too many people have the illusion that money is safe as long as the balance doesn't go down, but the reality is that inflation will eat into your purchasing power unless you learn how to properly manage and invest your wealth ," writes David Ning of MoneyNing.com.
6. I'll never learn enough about investing to make a difference in my savings.
7. Banks and bill collectors will get their way no matter what I do.
8. If I start dipping into my savings now, I'll have plenty of time to make up for it later.
9. I want to convert my 401(k) to a Roth, but I can't take the tax hit.
10. I'll figure out how much money I need for retirement when I get there.
11. Once I get my kids through college, I'll finally start saving for retirement.
12. I'd rather kill myself working now so I can rest easy later.
13. I have all the time in the world to plan my will.
Read more from Yahoo Finance >>
3 Money Lies You Should Stop Telling Yourself By Age 40
Business Insider By Mandi Woodruff
Most of us know what we should be doing with our money. But saving and investing and filling out paperwork is hard, so we tend to make excuses to avoid it.
By the time you hit 40, rationalizing away your bad money management habits starts to have a serious impact on your financial future (not to mention age you).
Here are some of the top money lies that you should stop telling yourself by age 40:
1. Debt collectors will stop chasing me once I'm in retirement, so why worry about it?
Think again. Even student loan debt can chase you into retirement. The Treasury Department has been withholding as much as 15% of Social Security benefits from a rapidly growing number of retirees who have fallen behind on federal student loans — five times as many as in 2001.
2. I can definitely get by in retirement with less income than I'm making now.
Leaving the workforce might help you cut costs in some areas — for example, your pricey commute to the office — but you can never underestimate the cost of aging. " Many studies show that some retirees even spend more in retirement than they did when they were working," says Susan Garland, editor of Kiplinger’s Retirement Report. A s the years go by, your health-care costs, house-related maintenance costs, insurance, and property taxes are sure to be on the rise.
3. I can always save more by postponing retirement until my late 60s or early 70s.
" More and more Americans say they plan to pay for retirement by working longer, but in reality many retirees end up quitting sooner than planned," says Greg Burrows, senior vice president for retirement and investor services at The Principal.
One third of American workers said they plan on working past age 65 in a survey by the Employee Benefit Research Institute, but more than 70% of retirees said they actually quit before that milestone.
4. I can always rely on Medicare for my long-term health care needs.
Medicare is an excellent resource for retirees needing health-care support, but here's a wake up call: It doesn't cover all long-term care. Medicare coverage excludes extended nursing home stays, custodial care, or an in-home nurse to help out if you're unable to dress, feed, or bathe yourself.
"Medicare pays for limited nursing-home and home-health care for short periods to provide continuing care after a hospital stay," Garland says. "For example, skilled care in a facility is limited to 100 days. It may be wise to consider long-term care insurance to cover those costs."
5. My nest egg will be safe in a bank account.
Never underestimate the crippling power inflation has over your retirement savings.
"Too many people have the illusion that money is safe as long as the balance doesn't go down, but the reality is that inflation will eat into your purchasing power unless you learn how to properly manage and invest your wealth ," writes David Ning of MoneyNing.com.
6. I'll never learn enough about investing to make a difference in my savings.
7. Banks and bill collectors will get their way no matter what I do.
8. If I start dipping into my savings now, I'll have plenty of time to make up for it later.
9. I want to convert my 401(k) to a Roth, but I can't take the tax hit.
10. I'll figure out how much money I need for retirement when I get there.
11. Once I get my kids through college, I'll finally start saving for retirement.
12. I'd rather kill myself working now so I can rest easy later.
13. I have all the time in the world to plan my will.
Read more from Yahoo Finance >>
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