13 retirement myths

Myth No. 1: You need a big income to build a big nest egg. Other myths busted: A million bucks is your magic number and what it takes to retire early - from Money Magazine.

Everyone has debt
Mary and Martin Pearsall
MYTH
Everyone has debt
Mary and Martin Pearsall have lived frugally, saved regularly and invested wisely in their 30 years of marriage. They've also managed to avoid the kind of crippling debt that can spoil the best-laid retirement plans. They steered clear of credit cards by living within their means, and they've dutifully paid the mortgage on their $250,000 Colorado Springs house. They now owe just $64,000.

"We've been careful without being draconian," Martin says. "We would never accumulate debt we couldn't handle."

Martin worked as an Episcopal priest until last year, and Mary has been a personal trainer and a business consultant. Now, with the help of a sizable inheritance from Martin's mother, they have a portfolio worth over $1 million. With no major debt to hold them back, the Pearsalls plan to scale back their work lives soon and travel, as they've been hoping to do for ages.

"I want to be disencumbered from having to be somewhere," says Mary.

For most people, during a time of economic growth and soaring markets, it's easy to believe that income will keep rising faster than debt payments. But in retirement you can no longer count on that unlimited potential for better pay. If you don't cut your debt load while you're still working, says Marilyn Dimitroff, a financial adviser in Bloomfield Hills, Mich., you will face the worst possible scenario: a retirement saddled with mounting debt and only a limited income to repay it.
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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.