The Big “R”, retirement, seems to be a constant area of worry and anxiety across generations, from Millennials who worry they will never be able to retire to Boomers who are now wondering if what they’ve saved will suffice for their future. Below are five top misconceptions regarding retirement and how to be ready when your time comes.

1. I can make up for lack of planning early on by saving more in the final years
   When asked which strategy would be most beneficial in “making up time” for retirement planning, most Americans answered they would save 3% more of their salary in the last five years before retirement, over working for two additional years or delaying Social Security benefits for two years. Unfortunately, this is the least financially impactful method to boost your retirement savings, so you may want to contemplate a few extra working years, or at least assess the value in waiting to receive Social Security benefits.
2. I will just keep working when I’m “retired”
   Many Americans assume that even when they “retire” from full-time work, they will continue to work part-time, whether to simply remain social and active or for financial motivations. However, this is actually fairly improbable reality for most. In fact, about 79% of workers polled by the Employee Benefit Research Institute said they plan to work for pay during retirement, but only 29% of current retirees actually work. While the strategy for many is to work, life and the workforce may look immensely different when you go to retire, so it’s smarter to prepare in advance rather than presume money will continue coming in through a regular paycheck.
3. Social Security is going bankrupt, so I shouldn’t count on the system
   To be certain, there is a great deal that could be improved within the Social Security system, its prognosis may be better than many believe. Even if the government does not repair the financial state of Social Security, the system will keep accumulating payroll-tax income and other revenue to pay beneficiaries most benefits for decades. According to a report by Social Security trustees, after 2034, the system will only have funding to pay 77% of scheduled benefits. So, while most beneficiaries would need to modify spending, they would just need to calculate a 23% differential, not an absolute loss.
4. Social Security benefits aren’t taxed
   This may be the most misguided claim since the Social Security Administration does impose taxes on beneficiaries, specifically those who bring in other income. Retired singles who bring in more than $25,000 annually (outside of their SS benefits) and couples who make more than $32,000 could be taxed up to 50% of their benefits; singles making more than $34,000 annually and married couples bringing in more than $44,000 could have up to 85% of benefits taxed. Therefore, for many, not working during retirement may actually be more financially desirable and beneficial.
5. I’ll invest in cash rather than stocks for a long-term investment plan
   When questioned about the most profitable assets to invest in for over 10 years, the majority of Americans replied with cash or real estate over stocks, gold/precious metals or bonds. Although real estate is not an undesirable long-term investment, cash holdings, such as money-market accounts, only yield dividends that are on pace with inflation at the time, which is less than reliable. Many stay far away from the stock market out of fear or lack of knowledge, but statistically, stocks render higher, more significant dividends. Working with a financial advisor or taking the time to really do your homework on the market can not only ease your stock investment worries, but potentially land you with higher yields.

While you cannot prepare for everything that may arise when you are retire, educating yourself and learning about common retirement risks can put you on the path to financial freedom. So whether that means talking with a trusted financial advisor or simply taking the time to do your own research, start developing a retirement plan now that will help you feel secure when that day finally comes.