The 5 Retirement Expenses You Must Know
Everyone wants to be prepared for retirement when the time comes. Saving when you’re younger can help put you on the path to independence once your working days have ended.
Did you Know? 88% of Americans are worried about “maintaining a comfortable standard of living in retirement”.
However, there are many retirement expenses that pop up that may be overlooked. The 5 retirement expenses listed below are some of the most common ones that people do not account for when saving. This list is courtesy of David Ning, a financial planner and owner of MoneyNing.
Even Retirees Have Bills
- Account for Inflation - Inevitably, inflation will continue, and things will become more expensive. Remember, though, that not everything inflates at the same rate.
- Some Expenses Are Temporary – Especially when discussing things like mortgages, these are debts that will eventually disappear. Make sure you have enough to cover these costs, but remember that you won’t be paying them forever.
- Taxes Still Exist – After retirement, you will still be taxed. Things like Social Security, IRA & 401(k) withdrawals, and pensions are all taxable at different rates. This is probably the most important expense to remember, as they represent a big cost.
- Expect the Unexpected – You will always have to deal with unexpected expenses. Being able to cover maintenance or repair costs is extremely important, especially after you retire. For seniors, also, comes the risk of medical conditions and medication. Always have some money put aside for emergencies and unexpected expenses.
- Paying for That New Hobby – With more free time on your hands, you may find yourself picking up a new hobby, or activity to occupy your time. This may require new equipment or tools that cost money. Covering the costs of these new items will allow you to enjoy your new lifestyle even more.
Retirement is a time for people to enjoy the things they love, and be with the people they love. Preparing for retirement can lessen the stress of this time, and can help you live comfortably in the way you want. These 5 retirement expenses must be accounted for in order to avoid any surprises later in life.
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