Recently, it seems we’ve had a great many calls about retirement and those folks all seem to ask the same things when it comes to their planning.  Last week, you might remember I shared some ideas about retirement saving and the idea of budgeting in your annual savings just like you might budget in your car payment each month. 

This week, though, I want to share some ideas about a few things that many people don’t realize will actually cost MORE once you retire…

·      Travel – It might seem like travel as a retiree should cost less than it did when you had to carry the whole family, but the reality is, retirees often take longer trips with a higher expectation of luxury.  Two weeks instead of one.  First class instead of coach.  You can factor is some additional expenses when you think about travel to see the grandkids or a trip to see old friends.  Don’t be surprised, though, that travel costs more than you expected.

·      Downsizing – This one is a surprise to a lot of newly-created retirees who have sold the family home and expect to pocket a substantial amount of that equity.  In reality, you’re more likely to make a lateral move when it comes to your retirement home.  Whether that’s because you’ve built a dream home or you’ve moved into a higher end condo with full amenities, be prepared to spend as much or even more than you used to.  Additionally, at some point you’ll also have to factor in the simple fact that at some point, you physically can’t cut the grass or shovel the snow, either. 

·      Your Daily Expenses – Things cost more year over year, simple as that.  Many times, it’s difficult to project what the costs of any given item might be in two decades.  Imagine saving for retirement in the late nineties for today.  Who could imagine the “extra” expenses of digital networks, online streaming services, and even cell phones?  Be open-minded about the fact there will be new expenses you may not be able to foresee. 

·      Healthcare – It’s easy to think, as a senior, that your health expenses will be covered by the government, but there are so many “gotchas” in the various plans that you have to expect to pay more than you might ever think.  It’s also worth remembering that the simple act of staying healthy is going to cost more, too.  Gym memberships, preventative care, proper nutrition, and even a good pair of sneakers are all going to add up, so understanding that and determining how to plan for it is a smart idea now, while you’re still generating income. 

I can think of an easy dozen more, but these should be enough to get you started thinking about how your plan to finance your retirement and the “real” costs of retiring. Hopefully, this helps you and if you have questions, me and the team are happy to help – even sit down with you and discuss your current tax strategy to see if you’re on track for the retirement you want, not the one you won’t enjoy.