Harris-Courage & Grady, PLLC
6 Unexpected Retirement Costs You Should Plan For
Many people approaching retirement have neglected to plan for some important expenses. Take time to consider how much you’re really likely to spend in these 6 areas to make sure your retirement funds will last through your retirement.
- Entertainment. If you assume the amount of money you spent on entertainment before retirement will stay the same after you retire, you’re likely to underestimate how much you will need. Remember that rather than spending the majority of your day working, as you did before retiring, you will be spending the majority of your time on recreational activities. Consider the types of activities you would like to spend your retirement doing, and estimate how much it would cost to do them full time.
- Living Expenses. Don’t forget that the cost of food, utilities, and insurance increases over time. If you own a home you’ll also still have to pay property taxes, even if you no longer have a mortgage. Property taxes also tend to increase over time. It’s best to plan for your living expenses to increase, and make sure you have a buffer.
- Debts. If at all possible, you should pay off your debts before you retire. Keep in mind that if you have cosigned on a loan for a relative, you may be required to repay that debt during your retirement if the relative becomes unable to pay it. It is wise to refinance the loan out of your name before retiring or to have some money set aside to cover that contingency. If you are facing overwhelming debt that is impacting your retirement plans, give our office a call at 855-269-2889.
- Health Care. Healthcare is largest area of expense for most retirees. Did you know that the average cost of healthcare during retirement for a 65 year old couple is estimated to be over $245,000? Retirees are eligible for Medicare, but it doesn’t cover everything. For example, hearing aids and eyeglasses are two very common and very expensive needs that are not covered by Medicare. Plan to spend about one third of your retirement budget on your healthcare needs, in addition to what you will receive from Medicare.
- Family Members. Many retirees are involved in caring for either their aging parents or their adult children. If your parents are still alive when you retire, it’s likely that they will need some type of assistance from you. It’s also common for adult children to come to their parents for help if they are facing a crisis. If it’s important to you to be in a position to help your relatives, plan ahead so that any requests for help don’t jeopardize your retirement.
- Home Maintenance. Even if you’ve paid off your home, it’s important to remember that homes require money for upkeep. What will you do if your furnace needs repair, a pipe breaks, or a window gets knocked out during a storm? Plan ahead for home maintenance expenses to ensure they don’t use up money you need for other areas of your retirement. You also don’t want to take on any new debt to care for your home.
While it isn’t possible to foresee every expense you’ll incur during your retirement, it is important to consider areas where expenses may be likely to avoid bankruptcy filing in Syracuse. Include these 6 areas of expense while planning your retirement to ensure that your savings will last.