Retirees, Beware: 6 Bills You Might Still Have To Pay for Life
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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Retirement is often seen as the finish line, but some bills don’t stop when the paychecks do. Even after you’ve left the workforce, certain expenses can continue to drain your savings for the rest of your life.
From overlooked medical costs to surprise housing fees, here are six kinds of bills retirees may be stuck paying indefinitely — and how to prepare for them.
Healthcare
Healthcare is most likely to be the biggest bill retirees have to keep paying, according to Yehuda Tropper, CEO of Beca Life Settlements.
No matter what combination of Medicare and private health insurance, expect “a lifelong bill,” Tropper said. Not to mention that drug prescriptions, dental, hearing and vision costs can also be significant, particularly as these faculties decline in your older age.
Many retirees are surprised by how much Medicare doesn’t cover, according to Gregg Cummings, CPFA, founder and CEO at Gregg Cummings Financial. “Without factoring in inflation and future care needs, these expenses can chip away at retirement savings faster than people expect. I always tell clients to plan for rising healthcare costs early, not just hope they’ll figure it out later.”
Long-Term Care
This is a topic nobody likes to talk about, but can’t be ignored, Cummings said. Yet almost half of seniors will need paid long-term care, which can cost “tens of thousands of dollars, depending on where you live,” Tropper pointed out.
Planning for this expense is 100% essential, Cummings said. “That might mean long-term care insurance, hybrid life policies or setting aside funds.”
Life Insurance
If someone has a life insurance policy, they’ll have to keep paying premiums to keep the policy active, Tropper said. However, you can sell the policy if the premiums are too difficult to cover on a fixed income.
Property Taxes
If you own a home, expect property taxes to be a permanent part of your budget, Cummings pointed out. Even with a paid-off mortgage, the tax bill arrives every year and can increase significantly over time.
“I’ve seen clients caught off guard when property values go up and tax rates follow. Depending on where you live, this can become one of your largest fixed expenses,” he said.
Do your best to plan for steady increases, and think about whether your current home will still make sense for you down the road.
Homeowners or Renters Insurance
Insurance is another nonnegotiable bill, no matter whether you’re renting or own a home, Cummings said. Given that homeowners insurance rates have been rising sharply, thanks to increasing repair costs and more frequent natural disasters, these costs may also be more than you anticipate.
“It’s important to build this into your retirement budget and keep an eye on rate changes each year,” Cummings said.
Other Bills That Stick Around
There are also the smaller bills that sneak up on you, such as subscriptions, memberships, streaming services and automatic renewals. Remember to review whether these are necessary, especially if you’re living on a fixed income.
And while travel may be a discretionary expense, many retirees want to travel more, not less. That comes with costs like travel insurance, rising airfare and unexpected expenses while abroad.
The more you can plan for these expenses ahead of time, the better off you’ll be when you finally reach retirement.
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