Myth 2: I should forget about asking for a raise until the economy recovers.
Lean and mean. After the recession it's become common to hear about companies operating with minimal staff. While worker productivity is up — they're working harder after staff cuts — they're not getting paid much more. Personal income grew 3% in 2009 after falling 1.7% in 2008. Typically, personal income grows around 5% to 6% a year.
The smartest managers don't want to lose their remaining talent. The best employees are in demand and are in a good position to ask for a raise, says Lee Miller, co-author of "A Woman's Guide to Successful Negotiating."
If you think you deserve a raise or a promotion you'll need to show why it's deserved. When you make the request, address the new skills or expanded role you've taken on; or the additional responsibilities you're willing to tackle.
Then demonstrate what you've accomplished and why it's in the company's interest to give you a raise. Tell the boss how you've made an impact, such as boosting sales or landing a new client.
Myth 3: I'm a renter and I don't own that much. I don't need a will.
Estimates vary but it's probably generous to say that about a third of all Americans have a will. "Everybody absolutely needs a will," says Peter Lang, an adviser with HighTower Securities, who specializes in estate planning. Without a will, the state will decide who gets your assets.
It's unpleasant to think about your own death, which is one reason why many people don't prepare. But having a will ensures your possessions are distributed according to your wishes, and helps family members avoid disputes.
The process also encourages you to think about other matters that might otherwise be put off, such as a durable power of attorney. This document gives another person the right to manage your affairs if you're unable. You may also want an advance health care directive to spell out what level of life sustaining care you would want to receive.
Hire an attorney who specializes in estate planning to evaluate your circumstances. State laws vary and planning for a blended family, for instance, can introduce additional complexity.
There is the option of online do-it-yourself wills and the other documents. However, to use these products, your circumstances can't be too complex.
Myth 4: I'm focused on my retirement savings goal and that's enough.
The headlines "Retire Rich" and "Retire Early" have been retired. The 2008 stock market meltdown has left a lingering impact. Workers with 401(k) accounts saw their balances cut by about a third on average. Now many remain anxious and it hasn't helped that their balances have only recently rebounded to their levels at the market's peak in 2007.
So now many are contemplating working longer. Slumping home values and the weak economy has added five years of work for the average employee, says Brandon Ross, managing partner of Peak Capital Investments Services, a financial adviser.
What's more, collecting Social Security later increases the benefit. Avoid if you can, the permanent reduction in benefits if you retire early. If you were born in 1960 or later and you claim your benefits at 62 instead of the full retirement age of 67, you reduce your monthly benefit by 30%. A $1,000 benefit, for example, is reduced to $700.
Those who were planning on living very well in retirement, may now have to live more modestly, says Panaccione, the Navigation Group adviser. That may mean giving up the personal trainer or new car every few years in order to maintain a comfortable lifestyle in retirement.
Beyond savings, make sure you're also evaluating your anticipated expenses. That includes major items such as health care, possibly in a nursing home or through an in-home nursing service.
The Center for Retirement Research at Boston College has shown that a worker retiring in 2020 will need about $142,000 to cover just out-of-pocket health care costs in retirement.