8 Facts You Didn't Know About Retirement

By Markets Fool.com

Most people are looking forward to retirement, yet they don't know as much about it as they should. Here are eight facts about retirement that will surprise many people -- see how many surprise you. Knowing some of them can help you plan and prepare for a better retirement.

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Many people have little or no retirement savings

According to the 2016 Retirement Confidence Survey of the Employee Benefit Research Institute, about 26%of respondents said they had less than $1,000 saved for retirement. A whopping 64% had less than $50,000.

Most Americans are worried about healthcare costs in retirement

According to a recentEdward Jones survey, about 60% of Americans of varying ages are worried about healthcare expenses in retirement. That may be surprising, but it's also quite reasonable, because of the following retirement fact.

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Healthcare costs in retirement can be massive

According to Fidelity Investments, a 65-year-old couple retiring this year will spend, on average, about $260,000 out of pocket on healthcare in retirement. And that's just the average! Many people will spend much more, though many will also spend less. You can increase your odds of spending less by getting and staying as healthy as possible, exercising, and eating nutritious foods.

You'll face a range of tax rates

You may be used to just paying taxes on income from your paycheck, but in retirement it's common to receive income from a variety of sources that receive different tax treatments. If you have savings in a regular, taxable brokerage account, for example, you'll face capital gains tax rates on any assets you sell. That's currently 15% for most people for long-term gains (and qualified dividends) and your ordinary income tax rate for short-term gains. Retirement savings accounts get different treatments, too. Money withdrawn from a Roth IRA or Roth 401(k) will be tax-free if you played by the rules. Money taken from a traditional IRA or 401(k) is treated as ordinary income. Even your Social Security income -- up to 85% of it -- can be taxed, if your income exceeds a specified level.

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You'll get some special tax breaks

For example, those aged 65 or older can use a higher standard deduction than the rest of us. For 2016, the standard deduction is $6,300 for a single filer and $12,600 for those married and filing jointly. But someone who is 65 or older can add an extra$1,250 or $1,550, depending on whether you're married and/or blind.

You can lose money with bonds

Many people assume that bonds, while tending to deliver less growth than stocks, are safe. They may notbe as safe as you think, though. For example, many don't keep up with inflation, so if you're earning 3% interest on a bond and inflation averages 4%, the purchasing power of your investment will shrink. Bond mutual funds can fall in value, too, such as if there are many people withdrawing money from them, forcing the managers to sell holdings before they planned to, for lower prices.

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Most Americans plan to retire after age 65 or not at all

Accordingto the results from the 16th Transamerica Retirement Survey of American Workers, released in 2016, 56% of women and 59% of men expect to retire after age 65 or not at all. This is worrisome, since the most commonage at which people actually do retire was 64 for men and 62 for women, as of a few years ago. This suggests that many people are retiring not by choice -- i.e. due to job loss or health setback -- and may not have as big a nest egg as they needed or wanted.

Social Security will probably replace less than 50% of your income

Accordingto the Social Security Administration, retirement benefits for those with average earnings will likely replace about 40% of your pre-retirement earnings. Those who had above-average earnings in their working years can expect a lower replacement rate, and vice versa. This makes it especially valuable to learn more about Social Security strategies such as when the best age would be for you to start collecting benefits.

The $15,834 Social Security bonus most retirees completely overlook
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Longtime Fool specialistSelena Maranjian, whom you can follow on Twitter, owns no shares of any company mentioned in this article.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.