Rumors are circulating that the longtime beloved Disney character Mickey Mouse is going away — for good. Panic followed the July 28 headline “Mickey Mouse Officially Being Retired Effective Immediately” from Inside the Magic, an unofficial Disney fan website.
In reality, however, Disney will lose copyright protection for the first version of Mickey Mouse from “Steamboat Willie,” a 1928 short black-and-white film, in the United States and several other countries in 2024. Later versions of the character remain protected by copyrights.
Just as Mickey Mouse isn’t going away any time soon, there are other mainstays regarding retirement that stand the test of time. Sorting through false claims can help retirees focus on the realities that shape their futures.
Here is some additional retirement “fake news” you may hear about:
— Social Security is going away for good.
— You must save $1 million to retire.
— You must be debt-free to retire comfortably.
— Downsizing will solve your financial problems.
— Passive income is making money while you sleep.
— Life in retirement will be cheap.
— Once you retire, you won’t need to invest.
Social Security Is Going Away
In recent years, calculations have revealed that the benefits coming out of the Social Security program are greater than the money going into it. Given this, some claim that the government aid will run out in the next decade. The Social Security Administration has noted that benefits are expected to be payable in full on a timely basis until 2037. Furthermore, adjustments could be made during the coming years to support and fund the program. These might include an increase to payroll tax rates or a reduction in benefits.
[Related:What Will the Social Security COLA Raise Be for 2024?]
You Must Save $1 Million to Retire
A nest egg of $1 million is often touted as a requirement for a comfortable retirement. Other sources set the figure even higher. Placing a dollar amount on the amount you need to save can be a good goal, but it may not meet your long-term needs. “No two retirements look the same, just like no two families look the same,” says Kris Carroll, financial advisor and managing director at Wealth Enhancement Group, which has offices nationwide. Many factors will ultimately determine how much is right for you. “Two families that live on the same monthly income may be very different depending on when they retire, how aggressively they invest or how much of their budget is fixed compared to discretionary spending,” Carroll says.
You Must be Debt-Free to Retire
For a comfortable next phase, some say that getting rid of all loan payments is essential. “Sure, it helps in a lot of ways if you are debt-free, but this misconception can lead to having way too much of your nest egg tied up in your house, which is an illiquid asset,” Carroll says. “We see retirees with 50% or more of their net worth tied up in their home. While that may be the right choice, focusing on paying that debt completely off may lead to other poor choices in saving and investing.”
[Related:Retirement Planning Mistakes to Avoid]
Downsizing Will Solve Your Financial Problems
If you’re short on funds in retirement, freeing yourself from the burden of a large home could help reduce expenses. “Downsizing to a smaller home is often seen as a solution to financial challenges in retirement,” says Kami Adams, a retirement income specialist at Creative Legacy Group in LeGrange, Georgia. “While it can free up some funds, other factors like health care and long-term costs must be considered.” You’ll want to compare your current budget to a forecasted one that accounts for a smaller home before making any changes.
Passive Income Is Making Money While You Sleep
Conversations about passive income often portray an image of making money on autopilot. You might hear about opportunities in real estate that generate funds on their own. But making an investment and gaining income from it typically involves more. “In truth, it requires ongoing management, monitoring and adjustments to ensure consistent and reliable income,” Adams says. You might need to read regular reports, check in on properties or make decisions with the help of a financial advisor.
Life in Retirement Will Be Cheap
It’s easy to think that expenses will decrease substantially once you quit working. There may be no need for work attire, long commutes and prepared dinners that you grab on the go. However, “while some expenses may decrease in retirement, others, such as health care and leisure activities, may increase,” Adams says.
It’s not unusual for a couple to plan to spend less in retirement and then do the opposite. “Proper planning ensures a realistic assessment of expenses and helps avoid potential shortfalls,” Adams says.
[READ: Costs to Include in Your Retirement Budget.]
Once You Retire, You Won’t Need to Invest
If you’ve spent years putting funds into retirement accounts, you might be ready to take a break. When you reach the age 59 1/2, you’ll be able to start withdrawing from some plans without paying a penalty. And after age 72, you’ll be required to take some money out of some accounts every year. Still, your investing days might not be over. “To combat inflation and maintain purchasing power, it’s crucial to keep some portion of your portfolio invested even during retirement,” says Celeste Robertson, an estate planning attorney and owner of The Law Offices of Celeste Robertson in Corpus Christi, Texas. If you sell your home or business, you’ll want to look for ways to reinvest the funds. Then you can live off the interest and support your lifestyle over the coming decades.
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No, Mickey Mouse Isn’t Retiring, and Other Retirement ‘Fake News’ You Need to Be Aware Of originally appeared on usnews.com
