They say that you can’t predict the future, but when it comes to growing older and finances there is at least some history to lean back on.
In other words, what you think might happen with your money, isn’t necessarily going to occur. Generations have found this, and it’s meant that there are umpteen myths and misconceptions that are lingering around.
All of the above is why this post has been put together. Let’s now cast our eye over four common myths about saving for the future – showing what you really need to know.
Myth #1 – You should stop planning for the long-term
Let’s start with the most ridiculous myth of all. Some sources have suggested that you should quit planning for the future as soon as you reach that elusive retirement age. Well, let’s debunk this immediately.
Even though you might not have as many huge purchases to make (although there’s more on this later), there are further considerations. It might sound morbid, but planning for a funeral is one of these so your family isn’t left with a huge bill, while making sure your finances are able to cope with elderly care is something else.
In short, there are always things towards the end of your life that you need to take into account.
Myth #2 – You won’t spend as much when you retire
For some reason, this myth lives on and on. However, once you retire you will suddenly have more time on your hands. The result of this is that you have even more time to spend money.
Sure, you can be as prudent as you’d like, but you will have plenty of extra hours to burn through cash if you’re not careful.
Myth #3 – There are no major purchases to consider anymore
You might have bought your house, dream car and every other stereotypical purchase in life. That doesn’t mean to say that the big purchases are over though.
On the contrary, there are other generations to feed. Studies have shown that a lot of parents are acting as the bank for their children when it comes to buying a home, while the same is even being said of grandparents.
Sure, some people will arrange this like a loan, but you still need the capital in the first place if you have decided that you want to aid your family in the increasingly tough economic climate.
Myth #4 – You need to save for ‘x’ years
This is perhaps the scariest myth of all. Most of us will pass through our working life with the belief that we need to save for ‘x’ years following our retirement.
There are a couple of things wrong with this approach though. Firstly, the average lifespan is increasing. Secondly, there’s no guarantee you are going to be part of the norm. You might completely outlive the average age, and this might mean that you simply haven’t saved enough money when it comes to the crunch.
