Myth No. 3: Downsizing in retirement will save you money
Expert: Caroline Delaney, executive vice president at San Jose, Calif.'s Hillis Financial Services
Many clients want to downsize, but their egos tend to get in the way. They think moving into a smaller home will cut back on their monthly outlay, but that tends not to be the case. They may move into a smaller home, yet the money they save in mortgage payments ends up going to remodeling the home or a new car payment. When giving up the space, make sure you are actually reaping the benefits.
When downsizing, many retirees also consider relocating to states that have lower taxes. This should not be the main consideration when looking to downsize and relocate. State taxation rates are always subject to change, especially in light of the financial difficulties many face.
Myth No. 4: You should pay off your home mortgage early
Expert: CPA, financial planner for Mackey McNeil and president of Bellevue, Ky.'s Mackey Advisors
Expert: John Bucsek, managing director of MetLife Solutions Group (MET - Get Report) in Cranford, N.J. Medicaid covers only catastrophic illness, not all of your health costs -- that's why they have Medigap and other supplemental coverages for an additional cost.