10 Surprising Retirement Costs You Didn't Budget For & 10 Resources You Can Turn To For Help
10 Surprising Retirement Costs You Didn't Budget For & 10 Resources You Can Turn To For Help
Think You Have Retirement All Figured Out?
For many of us, the image of retirement comes with relaxing on the beach, golfing, or spending more time with family. However, the reality is often far less carefree if you are blindsided by expenses that you never planned for. Luckily, there are plenty of resources available to you, built specifically to help you tackle these financial hiccups before they completely derail your golden years. Here are 10 surprising retirement expenses you shouldn't forget about and where to turn to for help.
1. Property Taxes
Many people assume that they don't have to worry about housing expenses anymore once they've paid off their mortgage, but don't forget about property taxes. Depending on where you live, you'll have to pay some percentage of your home's value in taxes.
2. Inflation
Don't be the stereotypical retiree complaining about how "back in your day," everything cost less. The price of goods and services is always increasing over time, mitigating your spending power, so keep that in mind.
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3. Taxes On Retirement Income
Retirement income, like pension payments and social security, is fully taxable just as your regular income from your job was. Make sure to keep that in mind and budget for it each year.
4. Healthcare
Even if you're in good health, regular visits to the doctor for things like vision and hearing, as well as to the dentist, can add up quickly. Surprise healthcare issues are also more common as you age, so make sure you have a good financial cushion for these things.
5. Travel Costs
Many retirees have dreams of traveling the world, but airfare, hotels, restaurants, and travel insurance are massive added expenses. Start budgeting early if your retirement plan includes a lot of time abroad.
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6. Home & Car Maintenance
Home and car maintenance becomes more difficult to do yourself as you age, and paying a professional to do it for you is costly. However, this continues to be a necessary upkeep expense.
7. Hobbies
In retirement, you have a lot more time to spend on your hobbies, but not necessarily more money to spend on them. More free time can mean more spending on things like golf, gardening, or pottery, eating away at your savings.
8. Insurance
Insurance costs tend to go up as you age. This includes life, health, and auto insurance, as insurance companies see age as a greater liability.
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9. Transportation Costs
You may incur unexpected transportation costs after retirement as a result of loss of driving ability, necessitating a reliance on public transit and taxis. Older vehicles with accumulated mileage also require more maintenance.
10. Debt Repayment
It's easy to forget about your debt when planning for retirement, but it's not going anywhere. Mortgage and credit card debt can drain your retirement funds.
Now that we've covered the costs that tend to take retirees by surprise, let's talk about the resources you can access for help.
1. Long-Term Care Insurance Providers
Long-term care insurance providers offer quote estimators, cost comparison tools, and educational resources to help you choose the right policy. These tools can also help connect you with an insurance agent who can give you personalized advice.
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2. Retirement Calculator
Several online banking platforms and government websites offer retirement calculators that help give you an estimate of how much money you will need to save to live comfortably in retirement. They use your personal information, income, retirement age, and assumptions about inflation and investment returns to give you a rough figure.
3. Social Security Administration
The Social Security Administration (SSA) offers tools to help you understand how much social insurance you will likely receive and when to start claiming it. This can help you gauge how much you'll need to save and how much you'll need to rely on other sources of income.
4. National Council on Aging
The National Council on Aging (NCOA) aims to improve the health and financial stability of older adults. They're your go-to retirement resource, providing programs and information to help you navigate the challenges that come with age.
5. IRS Retirement Resources
The IRS provides information on required minimum distributions (RMDs), tax planning, and retirement accounts. They can help you with tax budgeting and inform you on the tax breaks that you may be eligible for.
6. Local Area Agencies On Aging
Local Area Agencies on Aging (AAAs) are community-led organizations that provide services and resources to seniors. They can help connect you with resources that can provide emergency funding and other support.
7. Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau (CFPB) can provide you with resources for managing retirement accounts and budgeting effectively. They also prevent fraud, exploitation and help you deal with debt.
8. Financial Planners
A financial planner is a professional who can give you personalized advice and create plans to help you manage your finances effectively. You can be connected with financial planners through your bank, credit union, or government.
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9. Medicaid
Medicaid is a joint federal and state program that provides health coverage to millions of Americans. It can help you cover medical costs. Visit your state's Medicaid website to apply for funding.
10. Medicare Website
Medicare is a federal program that provides health insurance for people 65 and older. You can apply for coverage on the Medicare website, where you can also find tools for comparing health plans and see which drugs and services are covered.
