5 Overlooked Retirement Expenses
When planning for retirement, what you do not know can cost you. There are many savings-depleting expenses in retirement that people fail to factor in when calculating their future needs. Below are five you do not want to overlook:
- Financially helping children and grandchildren. In today’s economy, there is an increasing number of Americans who are providing financial support to their adult children or other family members. “Unless you specifically plan for that expense, letting adult children live at home free of charge or lending them a hand financially can be costly. As much as you may want to help your kids and grandkids, your own financial independence should be your first priority.”
- Retrofitting your house. Even if you have paid off your mortgage does not mean you are free of housing expenses. It is important to include in your budget both expected and unexpected ongoing and one-time costs, such as painting, replacing appliances, and repairing heating and cooling systems. “It also means setting aside funds for certain updates and renovations that may become necessary in the future to help make you home livable and safe as you age.”
- Hiring “replacement” services. As people grow older, they generally need help with day-to-day household chores and repairs. Replacement services for tasks such as grocery shopping, mowing, cleaning, should be considered when budgeting for retirement.
- Purchasing the new car. The car you have on the day you retire is unlikely to be the last one you buy or lease. Moreover, your driving needs change as you age, including the things you need in a car.
- Maintaining two houses. While owning two homes offers great advantages, the cost of owning two properties can be greater than you would expect. “You’ll probably spend several thousand dollars a year for dual expenses on everything form regular long care and ongoing utility bills to home-owners’ dues and a monthly fee to someone who can oversee your property when you’re not there.”
See Northwestern MutualVoice Team, The True Cost of Retirement: 5 Expenses You Shouldn’t Overlook, Forbes, Nov. 20, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.