October 6, 2014

5Things Retirement Plan Participants Get Wrong

Misconceptions about retirement planning and preparation abound according to Jill Cornfield, writer for Planadviser, starting with target date funds (TDFs). Specifically, some participants believe that the account balance in a TDF will never go down, that a TDF guarantees income in retirement, and that TDFs guarantee lifetime income. All three misconceptions are untrue.  Beyond TDFs, check out these 5 misconceptions:
1. ‘I’ll never be able to retire, anyway.’ So… why worry?
2. ‘I can’t afford to increase my contribution.’ Just do it… 1% at a time.
3. 'I don't need to worry about retirement now.' “Time discounting—when people discount something as not important because it is so far in the future—is a widespread misconception….”
4. ‘I’m responsible?!?’ “No one is responsible for our financial security but us,”
5. ‘Oh, the plan has costs?’

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