Keeping a budget is a very important skill to know as you go into adulthood. But when you retire, you may unfortunately find some things you didn’t budget for, things that can be huge financial traps. We’ve looked at the most common budget regrets of retirees and republished them here for you.
Rising Healthcare Costs
Make no mistake about it: it is expensive to be elderly in America. Many retirees assume Medicare covers everything, but it doesn’t. Out-of-pocket expenses like dental, vision, hearing aids, and co-pays can add up fast.
Home Repairs
Even if your mortgage is paid off, your house still needs upkeep. Roofs leak, furnaces fail, and plumbing does all sorts of unpleasant things. Retirees often regret not setting aside a fund just for a repair crisis, and sometimes they have to ask their adult children for help.
Helping Adult Children
And speaking of. Many retirees didn’t plan on still financially supporting their kids - but it happens more often than you’d think, especially if one of the kids or grandkids gets sick. Unfortunately, many people end up eating into their own savings trying to help their family.
Travel Plans
Plenty of retirees dream of travel - but forget to budget for it beyond the first year. Cruises, road trips, or simply visiting family members can cost a lot over time, and then suddenly you have good experiences but no money.
Taxes in Retirement
Just because you’re retired doesn’t mean Uncle Sam leaves you alone. Withdrawals from retirement accounts, Social Security taxes, and property taxes can be bigger than expected. Many retirees bitterly regret not factoring taxes into their monthly budget.
Inflation
A dollar today won’t stretch the same way in 10 or 20 years. Many retirees forget to account for how inflation can slowly chip away at their wallets, and they end up in trouble. If you don’t have an financial advisor, maybe it’s time to get one of those?
Long-Term Care
No one wants to imagine needing a nursing home or in-home care - but it happens, and it’s expensive. Medicare doesn’t cover most long-term care costs, and without insurance it can drain retirement funds fast. This is something you might want to talk to your adult kids about.
Loss of a Spouse
Losing a spouse is emotionally devastating - and it can be financially devastating too. Retirees frequently say they weren’t prepared for how expensive it is to live alone. At some point, you simply may have to sit down and go over all the worst-case scenarios.
Hobbies and Entertainment
Retirement is a time for finding new hobbies, but you need to think about how expensive they are. Golfing and boating are very pricey, for example. If the budget won’t stretch to it, maybe you just shouldn’t do it.
Vehicle Replacement
Your car will probably not outlast you. Eventually, it will need replacing, and that’s a big cost retirees often forget to budget for. Financing a car on a fixed income can be tough, so be careful. And bear in mind public transportation isn’t cheap either, of course.
Downsizing Costs
Moving to a smaller place sounds like a way to save money, but many retirees are caught off guard by how expensive the transition is. Realtor fees, moving costs, even storage fees can eat into your retirement fund.
