Retiring soon and working on your retirement budget? You might think you’ve covered all the bases: housing, healthcare, dining, and transportation costs. After all, these are among the most expensive costs for retirees. However, it’s important to take time to think and make room in your retirement savings for the unexpected. Here are 7 hidden retirement expenses to plan for.
Increased Leisure Activities
You’re newly retired and ready to run out into the world and do all the things you said you’d do when you retired ... and do them all at once! The trouble is that, often in retirement, your budget is based on a fixed yearly income. Using most of it now means having less later. Be sure to factor in plenty of room in your budget for these retirement expenses so that you end up with both the time and the money to enjoy these activities.
Before you retire, sit down with a financial professional and discuss how you access the money in your retirement accounts, as well as how your financial situation varies each year. Your taxes could look very different in retirement than they do now. Make sure your hard-earned money is working for you as best it can. You’ll also want to meet with a tax professional* to keep your taxes to a minimum.
Between staying in school longer and delaying marriage, today’s young adults find themselves living with mom and dad more than ever before. If you desire to assist your children financially while in retirement, you’ll want to consider this as part of your future retirement expenses and try to minimize any unforeseen costs.
It isn’t just adult children who are moving in with retirees. Some retirees find themselves living with their elderly parents and providing their care. You might be able to anticipate whether your parents will need this support based on their financial situation. However, if they’re not open to sharing their financial information with you, it’s best to investigate in advance what options might be available and how much you are able to help.
Maybe you’ve long earmarked a portion of your retirement savings for travel. When budgeting for retirement, it’s important to budget for both planned and unplanned travel. Perhaps you have children or grandchildren who are getting married and having children of their own whom you’ll wish to travel and see frequently. Or a sick relative you’ll need to fly out to care for. Try to prepare for the planned and unplanned travel expenses the best you can, as travel can easily create some of the biggest retirement expenses.
Home and Car Maintenance
Ongoing maintenance on your home and car might not necessarily be the biggest cost but it can easily add up when it’s $100 here and $1,000 there. It’s important to think about and prepare for these unexpected and sometimes annual maintenance expenses as a retiree.
Home Safety and Security
For many seniors, with age comes concern over safety. If you plan to stay in your current home, you might need to be prepared to pay for some modifications to ensure your home is as safe as possible while you age. Whether that means installing a wheelchair ramp or additional handrails in the shower, you’ll want to keep this in mind.
We’re Here to Help
The best way to prepare for hidden expenses and reduce risk? It’s all about planning long before your golden years arrive. Retirement is new territory for people and there will likely be many unexpected events. It’s impossible to know how much of an impact these and other hidden expenses will have on your savings portfolio. Connect with your Farm Bureau agent and create a plan to achieve your retirement goals.
*Neither the Company nor its agents give tax or legal advice.