Retirement planning is easier when you have a clear understanding of the facts. Don’t let these common misconceptions lead you astray.

Myth 1: You cannot contribute to an IRA if you have a retirement plan at work.

Reality: Investing strategically in accounts with different tax treatments can be a smart move since it may help you manage your taxes during retirement. Having an employer-sponsored retirement plan doesn’t stop you from opening and contributing to a Traditional or Roth IRA.

In addition, contributions to a Traditional IRA may be tax deductible. However, your deduction may be limited if you or your spouse are covered by a retirement plan at work and your income exceeds certain levels.

For example, if you’re single and covered by a retirement plan at work, and your modified adjusted gross income is $62,000 or less, then you can take a full deduction up to the amount of your contribution limit. If your income is more than $62,000 but less than $72,000, then you can take a partial deduction, and if your income is more than $72,000, then you’re not eligible for a deduction. 

Roth IRA contributions aren’t deductible. Therefore, being covered by a retirement plan at work has no effect on your contributions.

Myth 2: There’s no hope of accessing your money before retirement when you contribute to a retirement plan.

Reality: Retirement plans were designed to help you save for retirement. Therefore, it’s best to leave retirement funds untouched until you retire. However, if you need access to your funds before you retire, most employer-sponsored retirement plans will allow you to take a loan and/or make a hardship withdrawal. You can withdraw contributions you’ve made to a Roth IRA anytime, tax- and penalty-free. You may, however, be required to pay taxes and penalties on earnings withdrawn from a Roth IRA unless one of the early withdrawal exceptions apply. Premature withdrawals from a Traditional IRA will be subject to taxes and an early withdrawal penalty.

Myth 3: Medicare will cover all my health care expenses.

Reality: Medicare covers some, but not all, medical costs for those ages 65 and older. Households on Medicare spend an average of 14 percent of their total household budgets on health care expenses, including health insurance premiums. That’s nearly three times as large a portion of the household budget as for people who aren’t on Medicare, who spend 5 percent on health care expenses. The Employee Benefit Research Institute estimates that a 65-year-old man needs $124,000 and a 65-year-old woman needs $140,000 to have a 90 percent chance of being able to cover health care expenses throughout their retirement years. This stat doesn’t include savings that may be needed to cover long-term care expenses.

Myth 4: Since my child will attend college before I retire, I should save for college costs before retirement.

Reality: As Forbes put it, when you’re on an airplane, the flight attendant tells you that in case of loss of cabin pressure, you should secure your own oxygen mask before assisting your child. The reason: you’ll be no good to your child if you pass out. The same principle applies here. If you don’t save for your own retirement, you may become a financial burden on your child in your later years. So take care of yourself first by building your retirement savings. Your child has many alternatives for financing an education.

Learn more about saving for retirement and check out these retirement savings calculators to grow your savings for the future.