6 Surprising Monthly Expenses Retirees Say They Didn’t Factor In
Written by
G. Brian Davis
Edited by
Zuri Anderson
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Could you have predicted all your current expenses 30 years ago?
Predicting future retirement expenses gets harder as you try to plan decades into the future. These experts find their retired clients often forget the following expenses before punching out for the last time.
Jump in Travel and Hobby Expenses
Work doesn’t just pay you income — it also keeps you busy. But when you retire, you suddenly find yourself looking for entertainment all day, every day.
“Early in retirement, you’re more likely to be healthy and energetic with items to check off your bucket list,” notes Tom Mathews, author of How Money Works. “Taking European vacations or golfing five days a week can quickly eat away at your budget.”
Travel doesn’t end with planned vacations, either. You may need to jump on a plane at a moment’s notice to visit a family member with a health emergency.
Financial Help for Family
Likewise, retirees often want to help their children or grandchildren out financially. That could include health crises, college costs, help with a down payment and beyond.
Financial advisor Steve Sexton of the Sexton Advisory Group sees this all the time with his retired clients.
“Many of my clients provide more help than they anticipated, but generosity without guardrails jeopardizes their long-term security,” he said.
Growing Home Costs
Too many retirees assume that because they’ve paid off their mortgage, they don’t have to worry about rising housing costs.
Property taxes and homeowners insurance will both rise every year, often faster than inflation. And that says nothing of maintenance and repairs.
“Homeowners should set aside 1% to 3% of their home’s value annually for upkeep, yet very few retirees actually do,” according to Sexton.
Growing Car Repair Costs
The same forgetfulness applies to cars: Just because you paid it off, doesn’t mean it’s cost-free.
Cars become more expensive to maintain as they age, not less. Finance and debt attorney Leslie Tayne sees her retired clients get into trouble underestimating car costs.
“Repairs are often expensive and time-sensitive, often forcing retirees to choose between tapping savings or borrowing debt,” Tayne explained.
Medical Costs
Think Medicare covers every medical expense in retirement? Think again.
“Healthcare costs such as dental, vision, hearing, long-term care and out-of-pocket prescriptions make some of the biggest surprises for my retired clients,” notes financial planner Beth Stenz with Edward Jones.
Long-Term Care
Long-term care gets expensive, fast. Even a shared room in a nursing home averages $119,340 a year, and private rooms average $136,948 according to the American Council on Aging.
Estate planning attorney Kevin Quinn of Legacy Counsellors sees long-term care bankrupt far too many retirees.
“Approximately seven in ten retirees will need long-term care at some point, and the average stay is three years,” Quinn pointed out. That math isn’t pretty.
Sit down with a financial planner to factor in these expenses, so you don’t get blindsided in retirement.
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