I am a calm person, but I can get a bad case of righteous anger when I see people deceived by common financial myths.

I want to bust these myths so you can have a more successful, fulfilling retirement!

1) The Easiest Myth to Bust: Stocks are risky

Stocks get a bad reputation sometimes. The news likes to highlight horror stories about investments gone bust or imminent losses. However, investors with a diversified portfolio of durable companies have experienced growth historically.

I can and WILL talk a lot about this subject, because I want people to be informed! Please read HERE for more information on this topic.

2) The Most Discouraging Myth: You need 1 million dollars saved to retire

This might be true for some people, but it is not true for everyone! I honestly think this myth just discourages people who can’t reach this number before retirement.

You can have a successful, fulfilling retirement without having saved a million dollars. It primarily depends on your cost of living and your fixed income. From my experience, thrifty folks in low-cost towns can often manage with much less.

This article will help you estimate how much you might need saved before retirement. It might be more than a million dollars, or it might be much less!

3) A Myth that Could Really Hurt You: You should take Social Security ASAP

I constantly hear people say they want to take their Social Security benefit at 62, because “you never know where Social Security will be later.”

I know that Social Security is only projected to be fully funded until year 2037. However, after that, Social Security is expected to be fully funded through relatively small changes in benefit amounts and taxes.

The situation is not as dire as we hear. I do not think waiting 5 years to claim increases your risk of missing out on benefits due to program failure.

BUT, if you claim at 62, you ARE missing out on higher monthly income.

If you claim at age 62, you generally lose 30% of your benefit. Every year you delay taking your benefit from your Full Retirement Age to 70, you get an 8% increase in your monthly payment.

Unfortunately, there is no guarantee you will live to age 70 or beyond and get to enjoy that higher income. When making the decision, you should always consider your general health and family longevity.

4) The Myth I Hear Most Often: You should move to bonds when you retire

Words have predetermined connections in our brains. When you hear “stock,” you think “risk.” When you hear “bonds,” you think “safe income.” It seems that the prevailing advice from the generations before us is that retirees should hold bonds because they are safer.

This is far from the truth.

Your age does not define your portfolio.

Your stock vs. bond ratio is a strategic decision based upon your risk tolerance, goals for the money, and your need for return.

When our grandparents were saving for retirement 40 years ago, it was easy to find a treasury bond paying 10% interest. Imagine a 10% interest payment each year, essentially guaranteed! Of course you would buy those bonds.

We don’t live in the same world our grandparents did though. (Although, trends have a way of making comebacks). Nowadays, you can expect a return closer to 1 – 2% on your bonds.

More than likely, bonds alone aren’t going to provide you the income you need in retirement.

5) Advisors’ Least Favorite Myth: You’re not successful if you don’t beat the benchmark

People like to win – I get it. I like to win too! To win, we generally think we must beat someone or something, so we often think we only win at investing when we beat the benchmark. The S&P 500 is often that benchmark.

Let me tell you, beating the benchmark does NOT equal winning!

The benchmark does not have any fees associated with it. Therefore, if you invest in an Exchange Traded Fund (ETF) tracking the S&P 500, you actually won’t keep up because your performance is reduced by the ETF fee. And that’s ok! At least, it is a normal hurdle for every investor.

So how do you win at investing?

You win by setting attainable goals unique to you. You then work hard to meet those goals. When it comes to finances, you can never measure your own success by someone else’s yardstick!

6) The Myth that Upsets Me the Most: Professionals can time the market

My skin crawls every time I see a sketchy add online or hear a bold radio commercial about “the secret to timing the market” or “listen to my patented method for how and when to pick stocks!”

If a financial professional says they can time the market, they are saying it to serve themselves, NOT you.

Over time, the stock market grows in value (see point #1). However, there are ups and downs along the way.

In a perfect world, we would all buy and sell our stocks like the diagram above. When the market is low, we would buy stocks on sale. When the market is high, we would all sell to get our profits. The process would repeat, and we would all make loads of money. 😊 $$

Unfortunately, the stock market can move quite sporadically. The market follows companies’ profitability over the long term. Over the short term, a small news story or nothing at all can cause swings.

Consistently predicting both when to buy and when to sell is impossible. Sticking to long-term investing principals vs. short-term gains chasing is MUCH safer and has historically proven success.

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I want my readers to be equipped with the knowledge and tools necessary to face every day financial situations. I hope that busting these financial myths gave you some new information! There are many more financial myths out there. Let me know if you suspect you found some financial myths that you want busted!