5 Financial Misconceptions About Retirement

September 03, 2025 By Laurie Kramer, CFP® »
Senior man with pc. West Financial Services, Inc.

If you are one of my fellow Gen Xers, you are likely between 10-20 years away from retirement! Congratulations – you are getting close. In fact, you are at an inflection point where statistically your retirement may represent a longer period of time than the time you have left to work. Whether you are Gen X or not, are you adequately preparing for a 30-year retirement? Yes, 30 years – a real possibility for many of you reading this. Planning for retirement is often seen as a straightforward task, but misconceptions can undermine even the best intentions, especially in a longer term scenario. These myths, if left unchecked, can result in financial shortfalls or a less enjoyable retirement. Let’s explore five common misconceptions and how to avoid them.

1. “I’ll Spend Less in Retirement”

Many people believe their expenses will decrease dramatically in retirement. While some costs, like commuting or dry cleaning may drop, other expenses often rise. I have seen many clients’ travel, leisure activities, and healthcare costs significantly rise in retirement. Healthcare alone is a major factor — with rising medical costs and potential long-term care needs, many retirees find they spend more than expected. It’s essential to create a retirement budget that accounts for these possibilities.

2. “Social Security Will Be Enough”

Relying solely on Social Security is a risky strategy. And while most know that Social Security should not be the only income source during retirement, I am always surprised how many are still relying on it heavily. Social Security provides a safety net, but it was never designed to replace your entire income. The average monthly benefit might cover basic needs but won’t support a comfortable lifestyle, especially with inflation eroding purchasing power over time. Supplementing Social Security with savings, investments, or other income sources is crucial to maintaining your desired standard of living.

3. “I Can Work as Long as I Want”

Some people plan to delay retirement by continuing to work. While this can boost savings and delay withdrawals, it’s not always within your control. Health issues, caregiving responsibilities, or layoffs can force early retirement (as many have experienced recently). Unfortunately, many retirees leave the workforce earlier than planned or desired. A smart approach is to plan for both your ideal retirement age and the possibility of retiring sooner.

4. “A Conservative Portfolio Is Best”

As retirement approaches, it’s natural to want to protect your savings by reducing risk. However, going too conservative too early can be detrimental. With longer life expectancies, many retirees need their money to last 20-30 years or more. Investing too conservatively within your portfolio might not keep up with inflation, diminishing your purchasing power over time. A balanced approach that blends growth and stability often works best.

5. “I Don’t Need a Retirement Plan Yet”

Procrastination is one of the biggest retirement planning pitfalls. Many believe they can start saving later and still catch up. However, the power of compounding works best over long periods. Starting early allows your investments to grow exponentially, even with smaller contributions. The earlier you start, the more flexibility you’ll have in adapting to life’s changes. Didn’t start early? There is no time like the present!

Retirement planning is about more than just saving money — it’s about understanding your future needs and being as prepared as you can for the unexpected. By addressing these misconceptions, you can create a more resilient and fulfilling retirement plan and realize the life you want once you shed the daily responsibilities of a career! Start early, stay flexible, and approach retirement with realistic expectations. Last, and perhaps the hardest of all, ask for help and guidance — I and the team here at WFS are always ready to help build (or modify!) a plan.

Meet Laurie Kramer, CFP® »


IMPORTANT DISCLOSURES

West Financial Services, Inc. (“WFS”) offers investment advisory services and is registered with the U.S. Securities and Exchange Commission (“SEC”). SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the firm has attained a particular level of skill or ability. You should carefully read and review all information provided by WFS, including Form ADV Part 1A, Part 2A brochure and all supplements, and Form CRS.

This information is intended to be educational in nature, and not as a recommendation of any particular strategy, approach, product, security, or concept. These materials are not intended as any form of substitute for individualized investment advice. The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. You should not treat these materials as advice in relation to legal, taxation, or investment matters. Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisers.