8 Expenses in Retirement You Might Not Think About
As you prepare for retirement, it’s important to understand the expenses that you may take on in this new phase of your life. Some of these you may already know about, some might be new, and some might be further down that road, but are important to think about now.
Some expenses in retirement you may not of thought about:
- New hobbies
Whether it’s a sport, traveling, woodworking, or something completely different, if you choose a hobby to fill your time, be sure you understand what the hobby will cost you so you can budget accordingly.
- Home Renovations
As you approach retirement, you may want to think about any upgrades you’ve been meaning to do to your home. Maybe you would like to replace some appliances, or possibly make the bathroom a little more luxurious. You might also just need to do expensive, yet necessary, updates, such as roof or plumbing repair. Planning for this in advance may help you not overspend your retirement income.
- Caring for a Parent
It’s tough to think of your family members needing help, especially one who helped you as you grew up. But, aging parents is a fact of life and they may need help when you reach retirement. If you are caring for a parent, you may want to consider speaking with a CPA or tax specialist because there might be potential tax deductions that you may be able to take for caring for a parent.
Just like we don’t like to think about our parents aging and needing help, we also don’t like to think about ourselves aging. Ignoring this though, could spell retirement disaster when it comes to finances. As you prepare for retirement, look at your health, your family’s health history, and really evaluate what sort of care you may potentially need as you age.
You’re done working, which is great, but that doesn’t mean you will stop paying taxes. As you make a retirement plan, be sure to know what you will be paying taxes on so that this does not come as a shock on tax day!
Right now, you may be about to pay off your home (or maybe you already have!) but, do you know if you will want to live in your current home or even city for the rest of your life? This is an important question to ask yourself to give you better sense if the money you have saved for retirement will be enough to cover all your expenses.
Homeowners, auto, life, long-term care, RV, medical…these are just a few insurance types that you might be paying as you enter retirement. Now might be a good time to evaluate all your insurance, research for the best rates and service, and decide what you really need and what you might be able to take off the list.
- Caring for kids (or grandkids)
Now may be a good time to evaluate your children’s situations because you may be faced with helping bail out your children if they aren’t financially secure themselves. You might also find yourself helping with different expenses for your grandchildren. These things can really impact your personal finances if you don’t prepare in advance.