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Busting common retirement myths

Most Americans know that one of the keys to having a comfortable retirement is planning ahead. But, as boomers have scrambled to recover from the economic downturn and thought about staying in the workforce longer than they expected, outlining a budget may have fallen by the wayside. 

When you do start drafting a plan, there are some traps that you should avoid. Years of conventional retirement wisdom may no longer apply to many retirement calculations, and it's good to stay informed about the latest developments that could affect retirees.

Finance writer Dave Carpenter recently explained some of the most common retirement myths in The Boston Globe, starting with Medicare.

He says that one of the "most persistent misconceptions" of the program is that it covers all healthcare expenses. In fact, only treatments and services deemed "necessary" are the ones that are covered for beneficiaries - and your definition of necessary may conflict with that of the government's. Everything from medication to routine dental exams may not be covered by traditional Medicare plans, so it's wise to set aside some of your nest egg for these expenses if you will soon be depending on federal coverage for healthcare.

And, while the traditional image of a retiree may be a frugal grandmother who counts her pennies, things have drastically changed. Retirees these days want to have new experiences and try new things, which means that they aren't going to spend any less than they did before. Carpenter suggests that you should be receiving at least 70 percent of your preretirement income to live comfortably during retirement.

He also predicts that, as governments struggle to address their budget deficits, they may boost taxes for citizens. That means that if you're counting on moving down to a lower tax income bracket, you might be out of luck. In case this actually happens, it's best to factor this scenario into your retirement plan.

And what about Social Security? While many pundits have made a point of saying that the program is going to run out of money, Carpenter calls these claims "overblown." The benefits provided to retirees were never meant to be a primary source of income, and as long as you just consider them as complementary, you shouldn't be affected by any minor changes.

Additionally, many Americans are choosing to diversify their sources of retirement income by working longer - one Del Webb survey found that more than 70 percent of boomers plan to stay on the job in some capacity. 

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