I’m a Retirement Planner — Here’s 4 Things Retirees Must Budget for This Winter

If you’re like many people, you might not want to think about the impending cold weather months. However, winter is coming, so now is a good time to start financially preparing for it.

Snow and freezing temperatures — in some parts of the country — paired with often pricey holiday seasons can make for an expensive winter. Whether you stick around and brave out the cold or get out of town for the season, costs can add up fast.

Putting aside a little extra money now can help you avoid being strapped for cash if you’re hit with higher-than-expected costs this winter. This can allow you to avoid added financial stress and ensure you won’t have to scramble to pay any unplanned bills.

The sooner you start preparing financially for the winter, the easier it will be to build up a healthy cash reserve. Here’s a look at four expenses to work into your winter budget this year.

“So many people underestimate the additional expenses they’ll incur around the holidays, when they’ll see a bump in expenses due to gifts, travel and hosting family and friends,” said David Flores Wilson, a financial expert and the managing partner at Sincerus Advisory.

“We also find the overall stress of the holiday season means other stress-reducing and time-saving expenses are likely to increase, whether it’s taking an Uber instead of walking or ordering on Grubhub rather than cooking at home.”

This often leads to a major increase in spending.

“We often see people spending 20% to 30% more in November and December versus average spending throughout the year,” he added.

In 2023, people who celebrated the winter holidays expected to spend an average of $875 of gifts, decorations, food and other key seasonal items, according to the National Retail Federation. Keep this in mind as you set your holiday season budget.

Not only does winter bring the biting cold, but it also brings weather-related expenses.

According to Wilson, “A big snowstorm and unusually frigid temperatures could mean paying someone to shovel the driveway or dealing with frozen pipes.”

For example, the average cost to shovel a driveway big enough for two cars side-by-side is around $30-$50 per session, according to Angi. This price can be closer to $200 if you opt to have salt or sand put down.

Because of this, Wilson advised planning ahead for the unexpected this winter.

“A winter emergency fund would be prudent,” he added.

This can help with your winter expenses such as higher heating bills. For example, the average household heated by natural gas spent $855 in home heating costs last winter, as reported by This Old House.

It’s also important for retirees to talk to their accountant or financial planner during this time of year to get an estimate of what their tax liability will be in April.

“If it’s much more than expected, knowing during the winter can inform spending levels and help [you] avoid not having enough money to pay unexpected large tax bills,” said Wilson. 

“Many people have benefited from a high rate of interest on their cash in 2024, but since there’s no withholding on the interest, people could get a higher tax bill than they expect.”

In addition to your tax bill, you’ll also need to factor in the cost of paying a tax preparer to do your taxes (unless you handle this task on your own).

The average cost of a tax preparer for an itemized 1040 with a Schedule A and state return varies by the part of the country. For example, the mean cost is $285 in New England, $432 in the Pacific region and $217 in the Southeastern Central states, according to the National Society of Accountants.

If you live in a cold-weather state, you might be planning to get out of town during the winter months. Now that you’re retired, you have the freedom to become a snowbird and escape to somewhere warmer, avoiding the snow and freezing temperatures.

However, traveling for several months isn’t cheap. In addition to paying expenses on your full-time home, you’ll also likely need to rent a place in a warmer climate and pay for roundtrip travel costs — among other expenses.

For example, renting a home in Florida during the winter can cost around $4,000 per month or $12,000 for three months, according to Snowbird Haven. This might sound like a lot, but this is actually for homes on the cheaper side.

Being a snowbird is a luxury, but you worked hard for your retirement. If this is something you want to do, now is the time to start financially preparing for extended time away from the cold weather.