5 Bills You Start Paying When You Retire

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Just because you’re 65 and ready to retire doesn’t mean your financial obligations magically get easier or your annual income sources become less complex. While you might be familiar with managing a budget during your working years, retirement brings its own unique expenses that you’ll have to navigate through — Social Security benefits, Roth IRAs and your varied retirement savings accounts.

If you are age 50 or older and are staring down the barrel of your end-of-work timeline, it’s good to know what expenses carry over and what new set of bills you’ll have to factor into your savings plan. Here’s a look at the specific bills that often hit your retirement accounts harder so you can mentally prepare your financial plan once you reach full retirement age. 

Healthcare Costs and Medical Bills

Healthcare costs significantly ramp up once you retire. Not only are there Medicare and insurance premiums to worry about, but you’re also likely to need increased medical attention, regular check-ups and monthly prescriptions. 

Before retirement, your employer might have shouldered part of your healthcare costs. In retirement, you become responsible for these expenses, and short of going into credit card debt, you’ll need to factor these somewhat exorbitant costs into your budget.

Enrolling in Medicare is a start, but it doesn’t cover everything. Prepare to pay premiums for Medicare Part B, and possibly for supplemental coverage like Medigap or Medicare Advantage plans. Additionally, expenses for dental, vision and long-term care, which are not covered by Medicare, should also be considered when your allocating funds from your retirement savings.

Housing in Retirement Communities

Though retirement communities can be a fun location to spend your golden years, they also introduce a new type of housing expense that may be too much for your Roth 401(k) or traditional IRA to cover. These communities often charge monthly fees that cover a range of services like maintenance, dining and recreational activities.

However, when you are retirement planning, these fees can be substantial and are a significant change from your typical mortgage or rent payments. Be sure to consult a financial advisor to see if there are ways to whittle down these costs or if ultimately these new bills are worth it. 

Increased Leisure and Travel Expenses

Not that more free time to travel is a bad thing, but if you want to get the most out of the open calendar on your hands, you could find yourself spending more money on leisure activities than you have in the past.

You have earned the right to pick up and go whenever you want, but don’t forget to plan for these expenses so that you can enjoy your free time without worrying about straining your wallet.

Long-Term Care Insurance

This type of insurance can help cover the cost of long-term care that’s not covered by Medicare, such as nursing home care or in-home care services.

While not everyone purchases long-term care insurance, it’s an expense that typically starts in retirement or the years leading up to it. The premiums can be high, but they can also offer peace of mind and financial protection against the significant costs of long-term care.

Higher Utility Bills and Home Maintenance Costs

Just because you might be heading south in retirement, doesn’t mean your finances do. As you spend more time at home in retirement, and more time utilizing things like air conditioning and electricity, you may see an increase in your utility bills. Even if you downsize, your rates can still increase annually.

Similarly, as your home ages along with you, there might be an increase in maintenance costs or the need for age-related modifications. While these are not new bills per se, the scale and nature of these expenses can change significantly in retirement as you might have to outsource help for tasks you used to handle yourself.

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