Your less-than-ideal retirement system requires most retirees to make a series of decisions in their 60s that could determine their financial and health care future. But widely held beliefs around retirement and old age — many of them mistaken — can lead to ruinous decisions.

Be on high alert for these five myths:

1. You won’t live past 85.

If you land at age 65 in average health, odds are pretty good you will still be around at 85: a 55% chance for a woman, 44% chance for a man.

More than 30% of 65-year-old women in average health today will be alive at 90, and nearly 1 in 4 men. Believing the myth of an early demise and reduced life expectancy can cause you to make poor decisions around how to save and when to claim your Social Security benefit.

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Especially for couples. The odds that one member of a 65-year-old hetero couple will be alive at 90 is 49%. For a same-sex male couples, the odds that one partner will be alive at 90 is 40%. For same-sex female couples, the odds that one will be alive at 90 is 56%.

So, the highest earner in a household should wait until age 70 to claim Social Security. That patience means if someone lives into their 90s, they will have the highest possible Social Security benefit.

2. When you retire, you should shift to conservative investments.

Actually, playing it too safe can backfire given the long-term punch of inflation.

If you are relying on your personal investments (not a pension and not Social Security) to cover some of your living costs, you’re going to be a lot less stressed if your portfolio keeps up with the rate of inflation.

And that’s an argument for not plowing everything into “safe” bank certificates of deposit (CDs) or high-quality bonds.

Right now, a series of manufacturing and supply chain headaches is causing inflation to spike to an annual rate above 5% (as if anyone who’s filled a gas tank or shopping cart needs this pointed out).

But let’s consider that this inflation spurt isn’t permanent, and that we may settle into an average annual inflation rate of “just” 3%. That’s still way more than the 1% you’re lucky to get on a bank CD; similarly, a 10-year Treasury note has a current yield of less than 2%.

Earning less than the rate of inflation over a 25- to 35-year retirement will make your later years more stressful, as you will need to withdraw more of your portfolio to cover the higher prices for goods and services.

Two strategies for dealing with inflation in retirement are to keep a portion of your investments invested in stocks, and (here we go again) to consider delaying when you start Social Security payments.

3. Make it to 65, and your health care is free.

If only. Medicare covers a lot of your health insurance costs, but the program is not free. The minimum per-person monthly premium for a required part of Medicare (Part B) is $148.50 this year. Lower-income enrollees won’t pay that much, or anything, but higher income enrollees will pay even more.

Moreover, there are copays and coinsurance when you actually use Medicare. An analysis by J.P. Morgan estimates the monthly cost, adding up premiums and deductibles and out-of-pocket costs for someone enrolled in Original Medicare, is $479 this year. Enrollees in Medicare Advantage pay lower upfront premiums, but if they actually need care, copays and coinsurance can add up to even more.

Clearly, budgeting for your retirement health care out-of-pocket costs is imperative.

4. Medicare covers long-term care.

Nope. There is coverage for a limited stay in a skilled nursing home following hospitalization. But there is no coverage for having at-home assistance, nor does Medicare cover assisted-living costs.

Sitting down with a financial planner now to work through how you might plan for potential long-term care costs can make for less stress (yours and your adult kids) down the line.

5. You will be just as mobile at 85 or 90.

The stairs into your front door and the flight up to your bedroom that are a non-event now can become an impediment later on. But if you are intent on staying in your home through retirement, now is the time to game out how comfortable it will be 25 years down the line. Tackling age-in-place remodeling projects is something to do long before any need arises.

Carla Fried
Carla Fried covers the worlds of personal finance and residential real estate. ©2021 Distributed by Tribune Content Agency, LLC.