Gear up for these in case they end up applying to you.
If there’s one financial retirement myth that has the potential to be harmful, it’s the idea of living costs magically dropping once people wrap up their careers. It’s natural to assume that you’re going to spend less as a retiree — but that may not hold true across the board. Here are some surprise costs you might face that are actually quite common among people in retirement.
1. Home repairs
A lot of people aim to have their homes paid off by the time they retire. As such, it’s easy to adopt the mindset that housing won’t be a very large expense.
But if you’re planning to live in a home that had a 30-year mortgage (that you’ve paid off), you’re not exactly looking at a new property. That could mean facing a host of repairs later in life — repairs that eat up an uncomfortably large chunk of your retirement income.
2. Higher utility bills
You don’t need to pump the heat or air conditioning at full blast during the day when you’re at the office. Similarly, there’s no need to leave the lights on when you’re not in the house.
But once you stop working, you may find that you’re going to be spending a lot more time at home. That could translate to higher utility bills for you to cover.
3. More spending on entertainment
When you have a job that eats up 40 hours of your week or more, plus a commute, there’s often limited time for entertainment. But retirement is a different story.
Once you retire, you may get bored easily in the absence of consistent entertainment. But staying busy has the potential to cost a lot of money.
Even if you’re not hitting the town every day as a retiree, you may find that you’re spending more on things like cable and streaming services to stay occupied at home. You may also decide to pay for faster internet service. But these bills have the potential to add up.
4. Higher medical bills
Many retirees end up enrolling in Medicare — either right away or at some point. But unfortunately, there are a number of key medical services that Medicare won’t cover. These include dental cleanings and eye exams. As such, you may find that your medical bills are much higher in retirement than they were while you were working.
Also, health issues tend to arise with age. So on top of the services that Medicare won’t pay for, you may end up shelling out more money for medications and diagnostic tests — even if they’re covered by Medicare as a matter of course.
Prepare for higher expenses
The last thing you want to do is kick off retirement, only to realize that your bills are too high for comfort. To avoid that fate, read up on the different costs you might face. But also — and very importantly — do what you can to boost your savings so you have more leeway to spend on the things that lend to a better quality of life.
You don’t want to end up in a situation where you’re forced to sit in your home wrapped in blankets because you can’t afford to raise the heat on a blustery winter day. Similarly, you don’t want to end up rewatching the same TV shows again and again because you can’t swing the cost of an additional streaming service. And you definitely don’t want to end up in a position where you have to cut pills in half because you can’t afford your medication.
The more money you save ahead of retirement, the easier it will be to pay for all of these things. So make an effort to boost your savings, even if it means giving up a few of the things you enjoy in the near term.
