Five Myths About Retirement That Can Lead You Astray
Whether you are decades away from retirement or it’s right around the corner, it’s important to separate fact from fiction when it comes to planning for your postwork life. Here are five common – and often costly – myths that often mislead people about life in retirement. Keeping them in mind can help you avoid missteps and achieve your goals for a happy and satisfying retirement.
Myth #1 – Retirement life will be less expensive Retirement often frees up more time to pursue other interests and hobbies. This may include more travel, social activities and other pursuits that require a financial commitment. Depending on your
goals, be prepared for life in retirement to cost more than you might think. In particular, be cognizant that many people overestimate how much money they’ll save by “downsizing” their homes. While they may save on property taxes and utilities, they may encounter new costs related to their new, smaller living arrangements, such as homeowner association and facility fees.
Myth #2 – Health insurance is simple –and free!
Medicare is a critical benefit for retirees, but it wasn’t designed to cover everything. Medicare involves a complex combination of various policies and full coverage comes with costs.
Medicare Part A, the basic coverage for hospital insurance, is free for most Americans over the age of 65. That said, other forms of Medicare have costs associated with coverage. According to Medicare.gov, in 2023, the standard premium for Medicare Part B, for physician services is $164.90 per month. Medicare Part D, for prescription drug coverage, also involves monthly premiums. Most retirees will pay premiums for supplemental health coverage or choose a Medicare Advantage plan to protect them. Copays and deductibles can be included. Plan on health
care as a major expense in retirement.
Myth #3 – Social Security will take care of my financial needs in retirement According to the Social Security Administration, more than one-third of Americans rely on Social Security for more than half of their income in retirement. That said, it’s important to be realistic. The average Social Security benefit for retired workers in January 2023 is $1,827 per month. Even if you double that for a married couple, it is likely to be far less than your pre-retirement income, and far from enough to meet your needs in retirement. That’s why saving in a workplace retirement plan, IRAs and other types of investment vehicles, is critical to protect your long-term financial security.
Myth #4 – Taxes won’t be a major concern in retirement You might think that because you aren’t working, taxes don’t come into play. The reality is far different. Most people are required to pay taxes on a portion of their Social Security income. What’s more, distributions from workplace savings plans such as 401(k)s, 403(b)s and traditional IRAs are generally subject to income tax as well. Most income generated by bonds, bond
funds and CDs are taxable. You may even need to make quarterly estimated tax payments on your investment income and retirement plan distributions.
Myth #5 – Retirement will mean it’s time to kick back and relax
Given the longer life expectancies many Americans enjoy today, the reality is that leaving your position with a company or ending a career doesn’t necessarily mean you are done with work. Many people have the desire to remain active. This can take the form of consulting, using the talents and experience you have to continue to earn money. It also might mean spending significant time volunteering for organizations you support. In short, retirement doesn’t mean setting your talents, abilities and energy aside. For many, it’s the start of a new chapter in life.
Planning helps you stay reality-based
As you structure your retirement plan, it makes sense to put
some thought into what life will look like, and how that might impact your living costs. A good plan will help you set these myths aside and deal with the real world of retirement
Duane J Lusson, CFP, ChFC, CLU, MSFS, is a Private Wealth Advisor with Ameriprise Financial Services, Inc. in Ottumwa, Iowa. He specializes in fee-based financial planning and asset management strategies and has been in practice for 30 years. To contact him, call 641-684-4200 or stop by his office at 527 W. Second in Ottumwa, Iowa.
Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation. Investment advisory products and services are made available through Ameriprise Financial Services, LLC, a registered investment adviser.
Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Ameriprise Financial Services, LLC. Member FINRA and SIPC.
© 2023 Ameriprise Financial, Inc. All rights reserved. File #5613374
Hamilton Beach
My wife and I enjoy going to garage and estate sales to see what we can find. Once in a while, I’ll come across something I just can’t live without, so I buy it and take it home. Unfortunately, I’m more likely to make a purchase when I go to a sale alone (unsupervised) which can lead to buyer’s remorse when I get home; “Why did I buy this? Where am I going to put it?”
My wife frequently supports me when second-guessing my decision; “Why did you buy that? Where are you going to put it?” My wife buys stuff, too – but the things she buys are not usually mechanical and don’t have motors or moving parts. I’m a sucker for old kitchen gadgets, especially appliances. The appliances I like are older, often times antique, and bring up memories of the past, wonderful days from my childhood that seemed so simple. But, unfortunately, the gadgets may not work as well as they did when they were new; the electrical motors are old, and the gears are worn and tired. Maybe this is why the item was in a garage sale in the first place. But I still buy
them.
I enjoy playing with the appliance, like a kid with a toy. But eventually, it will end up being re-listed and sold or, worse yet, stored in the basement.
One time I found an old Hamilton Beach stand mixer. The mixer was identical to what Mom had when I was a kid, and she was teaching me to cook. It was in excellent condition and had all the original mixing bowls and attachments. The seller even had the original owner’s manual and cookbook that came with the mixer when it was brand new. I was all over that bad boy.
I called the seller and bought the mixer. Then had it shipped to my office at the radio station. I didn’t tell Melissa about my find – I would surprise her. She was surprised, “Why did you buy that? Where are you going to put it?”
“I’m going to put it in the kitchen and use it when, and if, my vintage KitchenAid mixer dies,” I explained. “I’ll also use it for smaller jobs when I don’t need all the power of the KitchenAid.”
The mixer was beautiful. I could read the speed setting under a clear lens on top: 1 Slow Mixing, 2 Heavy Batters, 3 Prepared Mixes, 4 Juicing Fruits, 5 Icings-creaming, 6 Whip Cream, 7 Whip Potatoes, 8 Candy-Beat Eggs, 9 Cooked Icings, 10 Attachments. Unfortunately, the lens on Mom’s old mixer was cloudy, making it hard to read the setting. “You set it at whatever speed feels right,” Mom said.
I assembled the mixer from memory, first setting the platter in the base. It was adjustable; If I moved the platter to the side, the mixer would automatically turn the bowl. Put it in the center, and the bowl stayed put. The mixer had a tilt head, and the top was removable to use as a hand-held mixer. The mixer came with the original beaters, too.
The Hamilton Beach beaters were attached as one unit, unlike modern mixers with two individual beaters. They have a bar down the front between the two beaters. I always thought the bar was a guard to keep you from getting your rubber spatula caught in the beaters, but that couldn’t be. The beaters drew the batter in from the back side, and Lord knows, I took a chunk out of more than one rubber spatula by getting too close to the beaters. Mom would say, “Don’t ever get your hands close to the beaters when the mixer is running; they’ll cut your finger right off.” But, of course, I didn’t need to challenge Mom’s warning after seeing what they could do to a rubber spatula.
Once in a while, on a Sunday morning, when I was making pancakes for the family after church, I would hear someone at the table complain, ‘There’s a piece of rubber in my pancake!’ I would smile while standing at the griddle, turning the next batch of pancakes, “At least it’s not a finger.” I loved this new (old) addition to my kitchen.
I washed the bowls, plugged
(Just the Other Day cont’d from pg 5) in the mixer, inserted the beaters, and turned the mixer on. Oh, how sweet the sound – and the memories it brought back.
That night while cooking supper, I used the Hamilton Beach as a hand-held mixer to mash potatoes. I loved watching the beaters grab the spuds from behind, chopping them up until they were smooth and creamy. By the time I was done mashing the potatoes, I had recalled how heavy that mixer was to hold as a kid. Eventually, the motor would put off a whiff of an electrical smell and would get hot while mashing potatoes. All those memories returned.
I can mash potatoes nearly as fast by hand as using the mixer, and a hand masher is a lot easier to clean. Fortunately, my vintage KitchenAid is still working. Unfortunately, the Hamilton Beach stand-mixer takes up a lot of space on the countertop, so it has been in the basement for nine years now. Occasionally, I take it out of the box and play with it. Oh, the memories….
Not long ago, I was surfing online Buy-Sell-and Trade sites. I wasn’t looking for anything in particular, just looking. That’s when I found it – and what a beauty! It was a vintage green Hamilton Beach Malt and Shake stand-mixer. My mind was immediately flooded with memories.
I am not old enough to have been part of the days of Poodle Skirts and Malt Shoppes of the 40s and 50s. However, I remember taking high school dates to South Side Drug, Kresge’s, Diner on Washington Street,
Brandon’s Café in the Ballingall Hotel, and other places for ice cream shakes and malts. All these stores had counters where you could sit down for lunch – some had booths, too, but I liked the stools with the spinning tops.
I liked taking my date on a motorcycle ride or driving in my ‘74 Chevy Nova on cooler days. Then we would go get an ice cream shake. All these counters had green Hamilton Beach shake mixers. But, my fondest and first memories of these machines were at the Runway Café at the airport.
The Airport Café was going to close. However, Dad didn’t want the airport left without a restaurant, so he bought it and renamed it The Runway Café. My sister Barb managed the café, and I worked for her when I was fourteen.
At The Runway Café, we had a triple-head Hamilton Beach shake mixer. I loved making shakes and malts. After filling the customer’s glass, there was always a little leftover in the cup for me to enjoy. Coincidence? I think not, especially when I planned it that way.
The metal mixing cups were very cold and quickly frosted on the outside. The cups were designed to be placed on a bracket that held them to the machine where they would mix on their own. But if I was in a hurry, I could hold the cup, tilting it a little to each side, thus blending the ice cream more quickly.
Sometimes when tilting the cup, the metal mixing blade would touch the side of the cup. ‘Bbbrrrtt, bbrrrrtt.’ Barb would quickly correct me, “Leave the cup on the machine!”
Occasionally, while tilting the cup, I’d hit the milk and ice cream at just the right consistency. First, the blades would sound off, Barrett, bbrrrrrtt. Next, the cup would erupt and spew ice cream shake into the air, flying everywhere. Naturally, this caused me to jump, which sent Shake flying in the other direction, too. Finally, I would drop the freezing cold cup on the counter, then it would roll off onto the floor - what a mess! Inevitably, Barb always seemed to be standing close by when it happened. “How many times have I told you….” Then she would throw a wet rag at me, “Clean it up.” Oh, those were good days.
These memories came rushing back to me as I looked at the shake machine online.
The man asked $125, but I didn’t want to spend that much on a novelty item.
“Maybe if the Hamilton drops below a Franklin ($100 bill), we can do business.” I put the thought out of my mind.
Last week, I saw the Hamilton Beach listed for sale again. However, this time the price was reduced to $80. “I did say if it dropped below a Franklin….” At this point, I clearly saw a future for me and that mixer to-
gether. I could imagine the fun of making milkshakes with our granddaughters and when we had company for dinner.
When I got home and showed my wife my new toy, she asked, “Why did you buy that?”
“To make ice cream shakes and malts. It’ll be a lot of fun,” I promised. Then she asked, “Where are you going to put it?” The antique appliance is quite tall and heavy.
“I’ll find a place.” I was too excited about my new toy to get caught up with minor details;
My wife had recently bought some instant coffee, so on my way home, I stopped at Zup’s grocery store for some vanilla ice cream and Heath chips. I was going to surprise her with dessert after dinner. My first attempt at an old talent would be making a knockoff of Dairy Queen’s Cappuccino Heath Blizzard, my wife’s favorite.
I scooped ice cream into the cup and added the coffee. I placed the cup on the bracket, and the machine started, but the ice cream was almost too thick; the
motor was struggling. I added a touch of milk. It was still pretty thick, so I tilted the ice-cold stainless steel cup to give the motor a little help. I could hear my sister saying, “Leave the cup on the machine!” The mixing paddles quickly thinned the ice cream and began spinning fast. The blades touched the metal cup. Bbrrrtt, bbrrrrrtt. Fortunately, I got lucky. Only a few drops of milk flew out of the cup, hitting me in the face. I laughed as I could hear Barb again, “How many times have I told you….”
By the time the homemade blizzard was done, the motor was warm and had that familiar hot smell. But, in the end, Melissa loved the Cappuccino Health Blizzard. I loved this new (old) appliance and all the memories it rekindled.
Although I had fun with the Hamilton Beach ice cream shake mixer, I’m trying to decide if I will keep or sell it. I just don’t want to see it in the basement with the Hamilton Beach stand mixer. Maybe next week, I’ll try to convince Melissa to go for a ride on my vintage motorcycle. Afterward, we can come to the house for a milkshake.
