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There is plenty of advice about retirement out there, including how much you need to save, when to start planning, and when to actually retire. Unfortunately, much of it is based on outdated assumptions and oversimplified thinking.
To help cut through the noise, we talked to financial advisors about three of the biggest retirement myths. Below, we explain why these myths don’t hold up.
Key Takeaways
- It’s never too early to start saving for retirement—in fact, an early start can have a dramatic impact on the size of your final nest egg.
- There’s no universal age for retirement—the number of workers aged 65 or more has nearly quadrupled in the past four decades.
- Retirement no longer has to mean stopping work completely; many people continue working, switch to part-time or freelance work, or start a new career.
1. “You’re Too Young to Think About Retirement”
Just 20% of Gen Z is saving for retirement, and many are instead prioritizing experiences and purchases that support their present well-being, according to a 2024 TIAA survey.
“The traditional path to retirement is simply not compelling to most in Gen Z,” Kourtney Gibson, TIAA’s chief institutional client officer, said in a press release. “They want financial freedom now so they can take professional breaks, travel, and pay the bills.”
But living for today comes at a cost. Young savers risk missing out on the most powerful tool for building wealth: Time. Thanks to compound interest, putting $100 a month into an investment fund that returns 5% annually starting at age 25 would yield nearly four times more by age 65 than if you had started at age 45.
Starting early also builds financial flexibility. “With so many years for the money to grow and compound, you’re able to switch careers later on, take sabbaticals, and pursue more fulfilling endeavors,” said Chloé Moore, founder of the financial planning firm Financial Staples.
2. “You Need $1 Million to Live Comfortably in Retirement”
Another common misconception is that retirement planning is about achieving a one-size-fits-all dollar amount. In reality, it’s far more effective to tailor your retirement goals to your personal circumstances, including cost of living, lifestyle expectations, and income needs.
For instance, Morningstar calculates that a $1 million nest egg typically generates a gross annual income of $35,000 to $40,000 in retirement. Higher earners, therefore, will need more savings to sustain their standard of living.
And a very small number of retirees (3.2%) have $1 million or more saved in their retirement accounts.
Lifestyle creep is another challenge. As income grows, spending often increases in tandem, making it harder for retirees to downshift once their earnings decline. Avoiding this pitfall requires personalized strategies like budgeting and mindful spending rather than relying on arbitrary savings benchmarks.
3. “Retirement Means Completely Stopping Work at 65”
Rather than reaching a hard stop for work at 65, many older adults are choosing to delay retirement or shift toward more meaningful pursuits. In fact, the number of workers aged 65 and over has nearly quadrupled since the mid-1980s. This trend is driven by less physically demanding jobs, evolving work norms, and raising the age for full eligibility for Social Security from 65 to 67.
This shift isn’t necessarily a bad thing—it’s not just about working out of financial necessity. It’s also about viewing retirement through a more holistic lens. “It shouldn’t be defined by a number or a specific age,” Moore said. “People are more likely to pursue other meaningful goals rather than come to a hard stop at 65.”
That might mean switching to part-time work, freelancing, taking a sabbatical, going back to school, or even launching a second or third career.
If you’re unsure about retiring, consider “test driving” it. Try easing into a new routine, cutting back on work hours, or taking a career break to focus on the social and mental aspects of retirement, not just the financials. With the average American now living to 78 (up from 74 in 1980), preparing for a longer retirement is key.
The Bottom Line
Retirement should be a personal, flexible goal. Whether you’re in your 20s or your 60s, the key is to cut through the noise, start saving early, and design a plan that reflects your goals, lifestyle, and values. In a world of longer lifespans and evolving career paths, a flexible, informed approach will serve you better than outdated myths.
