By Kurt Rossi

Are you retirement-ready? Many people dream of a retirement filled with time spent traveling, enjoying hobbies and making lasting memories with family. However, the realities of retirement can be far more challenging.

Between the emotional issues and financial constraints, retirement can be one of the most difficult transitions for people to make. These challenges, coupled with the current economic environment, have forced many to unexpectedly postpone their retirement dreams.

In fact, according to the Insured Retirement Institute, 35 percent of Americans plan to work after age 66, with 23 percent expecting to work after age 70.

The misconceptions noted below highlight a few of the inaccurate assumptions that have forced many retirees to adjust their plans.

I will spend less after retirement.

People often assume that retirees will need 70 to 80 percent of what they currently spend during retirement. While some savings will be realized from a lack of commuting costs and the possible downsizing of a home, the reality is that retirement expenses are often nearly 90 to 105 percent of their expenses before retirement. This is partially due to the desire to spend more time on hobbies and traveling during the early years of retirement when many retirees are at their healthiest. In addition, health care costs can also take a huge unexpected bite out of the budget, further increasing expenses.

Basic Medicare will cover all my health care expenses.

According to Fidelity Investments, the average 65-year-old couple will spend about $400,000 out-of-pocket on health care throughout retirement until age 92, not including long-term-care costs. The complexities of these costs have made it difficult for many savers to accurately estimate their effect on expenses after retirement. In addition, many retirees inaccurately assume that basic Medicare will cover the majority of their needs.

Medicare Part A covers hospital benefits and is usually provided at no additional cost. However, the outpatient services provided by Medicare Part B and the prescription-drug coverage offered by Medicare Part D have additional charges associated with them. Also, remember that it is often necessary for retirees to choose a private Medigap policy that can help cover the costs that Medicare doesnt cover. So, many retirees end up spending significantly more than they had planned.

Read more from the original source:
Getting ready for retirement