4 Bills That Could Increase Once You Retire
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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By the time most people retire, any kids are generally fledged, oftentimes their homes are paid off, and they don’t tend to accrue a lot of new bills. However, that doesn’t mean all costs of living go down, unfortunately.
There are some bills that can increase once you retire, and it’s important to plan for these in advance so you can be sure your retirement funds are up to it.
Property Taxes
For retirees who own homes or other properties, it’s important to remember that property taxes increase every few years and there’s not much you can do about it, according to Melanie Musson, a finance expert with InsuranceProviders.com.
“In some places of the country, the property taxes are so high that some seniors can’t afford to stay in their homes even if the mortgage is paid off,” she said.
The Cost of Food
Unfortunately, the most basic of essentials, groceries, are highly susceptible to inflation and they consistently get more expensive, Musson pointed out. Seniors can look to wholesale and discount grocery stores and the like for the best deals and buy in bulk, but plan for increasing food costs.
“Going out to eat can be another lifestyle expense that seniors fail to account for when planning a best-case scenario for retirement finances,” Musson said.
Healthcare
Probably the most likely bill to increase in retirement will be healthcare. Health insurance premiums also tend to go up every few years. Plus, Musson pointed out, the benefits provided by an employer may actually have been cheaper than some Medicare plans.
However, Musson suggested money on healthcare is money well spent. “Even though the cost of premiums for Medicare Advantage or Medicare supplement plans can be expensive, they’re a lot less expensive than healthcare costs can be if you have an accident or illness.”
Spending money on good coverage is key to avoiding the brunt of treatment costs.
Travel
A lot of seniors look forward to retirement as a time to do more travel, but traveling is not cheap, no matter the state of the economy. Be sure to build in funds for travel in advance if this is one of the ways you plan to spend your golden years.
Account For Inflation
The truth is, any and all bills will go up some after retirement due to inflation, and lately, Musson said, “Inflation has been far exceeding retirement budgets. This makes it much harder to pay for the cost of living when on a fixed income.”
It might force some retirees to go back to work part time or delay retirement, she explained.
Account For Longevity
Additionally, some people are living longer than they accounted for. “Retirees sometimes fail to remember that they have a potentially high number of years to live off their retirement savings,” Musson said. “They may retire and think they have a lot of money, but if they spend it too quickly, they’ll be left with nothing long before they pass away.”
When planning for retirement, assume that inflation will continue as it has. Plan for your taxes to increase every three years or so. Expect the most expensive possibilities. If you plan for the worst, you’ll be prepared for anything.
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