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

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.

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 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.

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.

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.

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.

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.

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.