Retirement Pitfalls: Advantages and Disadvantages of Retirement Plans

Beware of These Retirement Myths and Realities

A retirement plan is set up by an employer, insurance companies, trade unions, the government or other institutions to make a financial arrangement by replacing employment income upon retirement. It also is known as defined distribution or defined benefit plans. Most of the retirement plans provide tax benefits. The money contributed to the account is not taxed as income to the employee.

Retirement option provides a peace of mind in rest of the life. Here are some misconceptions about retirement plans that should be avoided while seeking for retirement plans.

Underestimating How Long You will Live

Social Security monthly payments depend on the period of receiving benefits. If a person lives up to the average life expectancy, he will receive probably the same amount of Social Security benefits. And vice versa, if he lives beyond the average life expectancy the monthly receivable amount will increase. He receives the benefit nearly 8% every year.

Not Paying Enough Attention to the Little Things

Increasing age relies more on others and that result in carelessness. It makes a difference when person carefully pays attention to details. For aged ones, it is very necessary to take medicines at the right time on daily basis. Also remember the schedule and regular appointments for eye checkups, dental care, and physical check-up.

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Withdrawing From The World

Challenges of age seem like very difficult to handle for many senior citizens. Staying home for the whole day shows physical and mental changes. But many times this leads to loneliness and intensifies the challenges. The mental condition can be weak if seniors avoid going outside and denying contacting friends or other people. Television is not an option for friends and family. Sitting all the time at home will be also bad for physical health.

Becoming a Victim

Scammers and criminals always wait for senior people for picking up the health policy of retirement. Many seniors receive a call from an unknown person claiming to be her/his grandson/relatives stuck in another country with a friend, turning to grandma to save the day. They demand help from them by saying that his or her son/daughter is stuck somewhere and need a financial help to save him/her.

Believing You are Too Old to Enjoy Life

It doesn’t mean to leave all fun and joys at retirement just because you are not of 35. When you feel such matter, just remember those who are passed away before you and never enjoyed their lives. Always try to identify and understand the essential components of meaningful retirement.

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