Retirement myths abound.  

Many Americans harbor basic misconceptions about Social Security, Medicare and other pillars of retirement. 

Here are six of the biggest misconceptions about retirement planning. Our story draws from a June report from the Center for Retirement Research at Boston College.  

Social Security won’t be there when I retire 

Anyone who follows Social Security news knows the retirement trust fund faces a fiscal cliff. 

More money is going out of the trust fund than coming in. If Congress doesn’t act, the federal program will run short of cash by 2032.  

News reports warn that Social Security is running out of money, going broke. That language is figurative and imprecise, but many Americans take it literally.  

Nearly two-thirds of us believe that when the shortfall arrives, benefit payments will cease. That finding comes from a paper by researchers at UCLA and Cornell University. 

In fact, when the reserve runs out, if nothing is done, the federal agency will have sufficient funds to pay about 83% of full benefits, according to an estimate from AARP.   

There’s a big difference between 83% and zero, but many Americans don’t see it. 

“It just seems to me that people are jumping to the conclusion that it’s going to be gone,” said Luke Delorme, a certified financial planner in Great Barrington, Massachusetts, who wrote the Center for Retirement Research post. 

Those across-the-board cuts will happen only if nothing is done. Policy experts widely believe Congress will step in to rescue the program.  

Many potential fixes involve collecting more payroll taxes from the wealthy, or capping their benefits. In any case, experts say it’s unlikely current retirees or near-retirees will see significant benefit cuts. 

I won’t need long-term care 

The long-term care industry serves people who cannot perform everyday activities, like dressing or eating, without help. And more than 80% of Americans will need that help at some point, according to a study from the Center for Retirement Research. 

Yet, most Americans seem to think they won’t need long-term care. In one 2024 survey of affluent older Americans, Boston College researchers found that long-term care ranked fifth among financial worries in retirement, behind stock market turbulence, Social Security cuts and other concerns.  

“People don’t want to think about it,” said Keith Singer, a certified financial planner in Boca Raton, Florida. “It’s hard to imagine not being able to take care of yourself.” 

Retirees ignore long-term care at their peril. Assisted living communities charge $6,200 a month, on average, according to CareScout. A home health aide costs about $75,000 a year, Delorme reports.  

Medicare covers long-term care 

Here’s another common misconception about long-term care: Medicare will pay for it.  

One 2025 survey by Nationwide found that 58% of U.S. adults wrongly believe Medicare covers long-term care. 

Some confusion is natural. The federal health insurance program for seniors does cover some short stays in nursing homes.   

But Medicare generally does not cover longer stays. The reason: Most long-term care is not considered medical care.   

“Imagine what you go to the hospital for,” Singer said. “That’s what Medicare covers.”  

You need $1 million to retire 

Americans love to read stories that estimate the retirement “magic number”: A savings target that will guarantee a comfortable retirement.  

One recent survey from Schroders put the magic number at $1.2 million. A Northwestern Mutual survey put the figure at $1.46 million. 

“Clients are always looking for a silver bullet: You hit a million dollars, and you retire,” said Dinon Hughes, a certified financial planner in Portsmouth, New Hampshire. 

Magic numbers might serve as a useful guidepost, in an era when American workers are expected to save for their own retirement.  

Retirement experts caution, however, that every retirement plan is different.  

Most retirees have nowhere near $1 million in savings. Millions of Americans retire comfortably on Social Security income alone.    

I won’t need stocks in retirement 

Retirees often assume they have no more need of long-term investments, like stocks, Delorme writes. 

That misapprehension relates to another: The idea that retirement doesn’t last very long. 

Retirees commonly underestimate how long they will live. A woman of 65, for example, is likely to live another 22 years.  

Retirement planners often assume an even longer retirement, to cover the scenario where you live to 90 or 100. 

That means a new retiree might still be spending money 20 or 30 years from now. With that time horizon, experts say, it makes sense to stay in the stock market. 

“At 60, 65, even 70, most clients have a 20-year span ahead of them, which is plenty of time to be investing in the stock market,” Hughes said. 

My taxes will be much lower in retirement 

As a general rule, Americans can expect a lower tax rate in retirement. Your income typically drops. Retirees tend to spend less. Not all Social Security income is taxed.  

But retirees might be surprised at how much tax they do pay.  

Withdrawals from traditional 401(k) and IRA accounts are taxed as income. Consider Social Security, pensions and other income, “and some retirees find themselves in a higher bracket than they expected,” Delorme writes. 

A large IRA balance on a computer screen might give retirees false hope, experts say, because the money hasn’t yet been taxed.  

“Taxes hurt 10 times more in retirement, because you’re not earning that income,” Hughes said. “It’s coming out of an account that is your life savings, and it has to last you for the rest of your life.” 

This article originally appeared on USA TODAY: Is Social Security broke? 6 big retirement misconceptions

Reporting by Daniel de Visé, USA TODAY / USA TODAY

USA TODAY Network via Reuters Connect