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MSN Money has a topic on four common retirement blind spots. I think it’s more about how we kid ourselves when it comes to planning for retirement. I admit to using at least one in my retirement planning and I think we all do. It may be overly pessimistic to uninclude all of these, but we should be prepared if our plans don’t work out.

I can work until I’m 70 or older 

I don’t have working until 70 in my plans, but I do plan on working into my 60s. The reasons that she cites are age discrimination in the workplace and the need to quit working for health reasons (your own or your family). I plan on eliminating the first possibility by being out on my own well before I am that age. The second is impossible to eliminate entirely and can only be offset by saving more earlier, which is always good advice.

I can count on Social Security 

Bwahahahahahaha! I don’t even have Social Security in my retirement plan as I indicated when I wrote about planning for my own retirement. I think anyone under the age of 40 should not expect to receive much, if anything, from Social Security. People who are on Social Security are surprised by how far it really goes (in a bad way). How far does it go?

Right now, accounting for taxes and Medicare, Social Security benefits replace about 39% of the average wage earner’s salary, says Sass. By 2030, that will drop to about 29%. “That’s a huge, huge cut.” 

So, even if you plan to include Social Security, plan to still replace 70% of your salary in retirement (you will use less, but it never hurts to save too much).

I’m saving for a better future

This one really hurts. You’re not saving for a retirement filled with monthlong jaunts to Costa Rica. You’re saving for a retirement where you’re not eating dog food. Most people have a romantic vision of retirement as a time of endless vacation and fun. Take a look at your parents or grandparents that are retired. Are they retreating to Rome for their yearly vacation?

Thank goodness for my inheritance  

If you are counting on your inheritance for retirement planning, you may want to look again. A study cited by MSN states that “only 1.6% of heirs will get $100,000 or more”. You can hope to be one of the 1.6%, but counting on it is another matter entirely. More and more people will have to spend down their assets to qualify for Medicaid in order to get medical costs paid for. Long term care isn’t getting any cheaper either.

Yes, this article is quite negative, but I think people need a wake-up call when it comes to retirement. Better now than when you’re 70.