Don’t Overlook These Expenses When Planning Your Retirement

Don’t Overlook These Expenses When Planning Your Retirement

Whether you are getting closer to retirement or not, most people look forward to the day when they no longer have to clock in and out every day, so to speak. Retirement can be a truly satisfying time, but for many people it turns into a nightmare because they didn’t take the necessary time to prepare for life after work. One of the biggest mistakes people make is simply not being aware of how many, or what kinds of expenses they will have in retirement. So if you haven’t thought about all the possible expenses that you might be responsible for when you retire, now is a good time to consider what could lie ahead. Overlooking or ignoring these expenses could leave you wishing you hadn’t called it quits.

General Living Expenses and Services

From buying new clothes to new household items and even your grooming expenses, all of these items add up. You might not give them a second thought while you’re working but once you retire you might need to consider these expenses a little closer. Plus, if you have a pet, you will need to consider its care as well.

Health Care

One of the greatest expenses retired people face is health care coverage and medical bills. The older you get the more likely your health is going to decline. That means your healthcare expenses are also likely to increase in retirement. So make sure you are ready for this increase or your entire retirement savings could be quickly wiped out.

Giving Adult Children a Helping Hand

One of the most common expenses that retired people face is helping their adult children with their finances. Some of these children are still on the younger side and have never left home, while others end up facing unexpected difficulties in life that lead them to ask for assistance. Whatever the reason, according to some reports more than half of all retired people say they help their adult children with some kind of financial help. So, have you made room in your retirement budget for this expense yet?

Mortgage Bill

One of the largest expenses anyone faces is their mortgage, but for someone that is retired this expense can end up swallowing most of their monthly income. If you still haven’t paid off your mortgage and you’re getting close to retirement, then do all you can now to get it paid off before you call it quits.

Inflation

Good old inflation. No matter how much you plan for life’s expenses you can never control the cost of living when it comes to inflation. Prices of goods and services can fluctuate at any time, so keep inflation in mind when you are planning your retirement budget.

Emergencies

Expect the unexpected. Emergencies and unexpected expenses are simply a part of life. So be prepared for them as much as possible, because they are certain to happen, and usually when you least expect it.

Retirement Savings Taxes

Your retirement savings are great, but you will have to pay taxes on that money when you finally withdraw it, so make sure you are prepared to add that expense to your budget as well.

 

We hope you found this article about “Don’t Overlook These Expenses When Planning Your Retirement” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at www.GROCO.com.  Unfortunately, we no longer give advice to other tax professionals gratis.

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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio

 

 

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