These myths could wreck your retirement -- but they don't have to

Retirement is an exciting milestone to reach, but if you don't plan for it properly, you could wind up cash-strapped and stressed. A big part of planning wisely, however, is avoiding dangerous myths that could lead you astray. Here three common ones -- and how to avoid falling victim to them.

1. You can live on Social Security alone

Many people assume that Social Security will pay them enough money to cover all of their retirement expenses. But that attitude could cause a world of financial problems for you as a senior. The reality is that Social Security only pays the average recipient today $1,543 a month. If that sounds like too little money to live on, you're in good company.

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The good news, however, is that there are steps you can take to boost your Social Security benefits. For one thing, push yourself to work longer and delay your filing as long as possible.

For each year you wait to sign up after reaching full retirement age, your benefits will increase 8% -- and that boost will remain in effect for life. Also, boosting your earnings during your career by picking up side jobs could leave you with a higher Social Security benefit during retirement, since benefits are calculated based on your specific wage history.

Of course, even if you manage to raise your benefits, you still shouldn't plan to live on Social Security alone. But you can do your part to get more out of the program.

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2. $1 million is more than enough for a comfortable lifestyle

It's easy to assume that if you manage to retire with $1 million, you'll have zero financial worries as a senior. But actually, a $1 million nest egg may not translate into as much monthly income as you'd expect. If you apply a 4% annual withdrawal rate to that sum, which has long been the standard, that leaves you with $3,333 a month. That may seem like a nice chunk of cash, but wait -- if you don't have a Roth retirement plan, you'll be taxed on your withdrawals and will be left with a lot less than $3,333 each month.

The solution? First, rather than settle on a random savings target like $1 million, think about your personal retirement goals and how much money it'll take to achieve them. If you want to travel a lot and live in a nice home, you may find that you need more like $1.5 million or $2 million to make that happen.

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Next, consider housing your savings in a Roth IRA or Roth 401(k). That way, your withdrawals during retirement will be yours to keep in full and you won't have to worry about losing a chunk of your income to taxes.

3. Your healthcare costs will be more than manageable once you enroll in Medicare

Medicare covers a lot of healthcare expenses for seniors -- but it doesn't cover everything, and it certainly isn't free or even cheap. Between your premiums, deductibles, and copays, you could wind up shelling out quite a lot of money, even for those services that Medicare does pay for.

To avoid having healthcare eat up an uncomfortably large chunk of your senior income, sock money away in a health savings account (HSA) if you're eligible. To qualify to contribute to an HSA, you must be enrolled in a high-deductible insurance plan, but if you are, the funds you contribute can be invested for added growth and carried forward indefinitely. That way, you'll have a dedicated source of money to pay for healthcare expenses once you're no longer earning a paycheck.

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Of course, in addition to saving in an HSA, it also pays to choose your Medicare coverage carefully. The more time you take to research your plan choices, the more likely you'll be to keep your costs reasonable.

In the course of preparing for your senior years, it's easy to come across bad information. Now that these myths are on your radar, you can take steps to avoid having them wreck the retirement you've worked so hard for.

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