9 Hidden Retirement Costs
While retirement planning should begin long before your last day of regular employment, many hopeful retirees forget to budget for hidden retirement costs. Ensure you don’t get blindsided by these common – and all too often unexpected – expenses as you plan for the golden years.
1. Expensive hobbies
In the first few years of retirement, it can be tempting to run out into the world and do all the things you always said you’d do when you retired – and do them all at once. The trouble is that your budget is generally based on a fixed yearly income. Using most of it now means you’ll have less later. Plan out a budget for your hobbies and activities that gives you some breathing room between big spending splurges.
2. Unforeseen travel expenses
Do you have children or grandchildren who will be getting married or having children of their own whom you will want to travel and see? Will there be a sick relative you need to fly out to care for? Keep travel expenses for family gatherings and life events in mind as you plan for retirement.
3. Medical expenses
Medicare may cover many medical expenses once you reach a certain age, but it’s important to know that there may be gaps in coverage, or additional coverage you may want to purchase. Be sure to explore your options and budget accordingly.
4. Home maintenance
As you age, so will the home you worked so hard to pay off prior to retirement. While the 25-year lifetime of the new roof you installed at forty may have been a great deal at the time, in retirement you’ll find that many long-term investments like this come due for maintenance. Have you saved enough to account for them?
5. Home safety and security
For many seniors, with age comes concern over safety and security – whether from falls or potential break-ins. Moving to an assisted living facility or retirement community with built-in safety and support structures built just for retirees like you may be an option you’ll want to plan for.
6. Helping adult children
Whether it’s an adult child who had chosen a college major with few employment opportunities or one facing a rocky job market, you may find that you are unprepared to assist your children financially in retirement, however much you may wish to. You’ll want to consider these possibilities in your retirement plan.
7. Caring for a parent
Many retirees find themselves in the position of entering retirement while their own parents are still living. It may be good to consider now who will care for an aging parent, and how that will be managed. Will they move in with you or another relative, or join a retirement community or care facility? Who will be responsible for these costs?
8. Moving costs
Many retirees choose to sell their existing homes and downsize to new living arrangements. Have you budgeted for help for the move?
Today’s dollar doesn’t have nearly as much purchasing power as a dollar back in 1960, and you should expect it will have even less purchasing power in 2025 and beyond.
In the end, whenever you choose to retire, ensure that you have budgeted accordingly for the lifestyle you’d like to achieve or maintain.
Guest Post by Bethany Village
This article is brought to you by Bethany Village, a retirement care and senior living community.