Here are the top 3 myths about retirement — they are very harmful to your long-term financial goals (plus 2 overlooked tips that will actually help you)

It’s the supreme irony many Americans live with: As soon as they enter the workforce they want out of it. It’s true that living and working on your own terms has much going for it. (Just ask any successful entrepreneur.) The trouble is, if you retire too soon or without enough prep, you could be cruising for a return trip to hell in a cubicle.

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One snag is that Americans in droves buy into a number of retirement myths that get in the way of their long-term financial goals. And in an age of rising costs and a falling stock market, that simply won’t do. As of this winter, the average retiree had $21,000 less in their savings compared to the start of 2022, according to a study by Clever.

That might not sound like a huge loss, but consider what they started with — the study also revealed that only 12% of retirees had at least the recommended $555,000 in savings.

Clearly more prep is needed before many Americans are ready to retire. And the first thing you should do is make sure you’re facing the challenge with all the right information. Here are three of the biggest myths about retirement — and what you can do to make sure your dreams are within reach.

‘I need to rely solely on Social Security for retirement income’

One third of Americans think Social Security income will cover most or even all of their retirement, according to a 2019 Gallup poll. Yet the Social Security Administration (SSA) itself acknowledges that its benefits will only replace about 40% of the average wage earner’s income in retirement.

To get the picture straight, use the SSA’s retirement calculators. With them, you can figure out just how much income the SSA will replace in your retirement. That’ll give you a good guideline of how much you’ll need to make up for yourself in savings.

‘Medicare will cover all my health care expenses’

Call this one, literally, an unhealthy myth. Like Social Security, Medicare provides health coverage but it isn’t a cure all. It will not pay for all of your health care and medical expenses in retirement, even once when you pass 65.

The vast majority of Americans must take health care costs into account to secure a steady retirement. As of 2021, U.S. couples aged 65 would need to save about $315,000 for health care and medical expenses to last through retirement, according to a Fidelity investments study.

That doesn’t even factor in long-term care — but fortunately, it also doesn’t include shopping around. Expenses for common procedures have no consistency in price from state to state, or even within city limits.

Read more: Hold onto your money’: Jeff Bezos says you might want to rethink buying a ‘new automobile, refrigerator, or whatever’ — here are 3 better recession-proof buys

‘I’ll need less money in retirement than in my working years’

Think your mortgage, shopping and credit card bills are going away the second you retire? Nice trick, if you can pull it off. Meanwhile, the majority of Americans who enter retirement treat it like a spending spree.

But here’s the reality: Yearly expenses for those 65 and over average $52,141, according to the U.S. Bureau of Labor Statistics.

If you plan to take a cruise, buy a boat or make another large purchase, go ahead — so long as you factor in your fixed living expenses. On the one hand, you may have delayed gratification for decades. But you’ll want to avoid a whiplash; commit to a freeing retirement as opposed to a free-for-all.

Reduce your health care costs

Now that you’ve faced some hard truths, here’s how to make your retirement reality a lot less harsh. Want to reduce costs? Take care of yourself. To put a new spin on an old proverb, an apple a day keeps Dr. Debt Collector away.

Chronic diseases continue to be the top causes of disability and death in the U.S., according to the Centers for Disease Control and Prevention (CDC). These also rack up some of the largest health care costs, the CDC states. And while some of the most prevalent maladies — cancer, diabetes, stroke, heart disease and Alzheimer’s — have no known cause or cure, many will benefit from a wellness-based approach.

Study after study after study points to exercise, especially walking, as a fabulous activity for people of any age and especially those approaching retirement years. A sedentary lifestyle, by contrast, is a prelude for a trip to lie on a cot in an expensive clinic or hospital. And that can cost you big: The average hospital stay is 4.6 days at an average cost of $13,262 and if surgery is involved, costs soar through the roof, debt.org statistics show.

Consider a “phased retirement”

A retirement party: Sure sounds nice, right? But if you’re having trouble figuring out how to pay for it, then maybe a gentle off-ramp into your post-work life is a smarter idea. New part-time jobs remain a viable option in the current high-employment environment.

A 2020 study by the Transamerica Center for Retirement Studies found that among those expecting to work in retirement, the top financial reason is wanting the income (51%), while the top healthy-aging reason is to be active (50%). Those nearly identical figures suggest a balance where working in retirement can promote wellness on multiple levels.