Whether retirement is near or decades away, you should always be financially planning for your senior years. Most people have a certain vision of what retirement will be like, but it varies drastically from the curveballs that life actually throws. That’s why it’s important to be aware of these possible expenses as you stockpile your savings and begin budgeting for your golden years.
Home and vehicle maintenance
If you’re like the majority of homeowners, you’ll want to stay in your current house for the rest of your life and keep driving the same car. Even if these assets are in great condition now, they may become costly to maintain late into retirement.
Homeownership can bring unexpected costs such as a burst pipe and a flooded basement. Kitchen appliances will break down. The roof will need redone. Maryalene LaPonsie and Dori Zinn of Money Talks News point out, “aging in place” can also cost you money. “Doorways may need to be widened for wheelchair passage, a bedroom added to the main floor or a bathroom renovated to accommodate the limited mobility that often comes with advanced age.”
The same goes for your car. It may be spotless now, but that can change over time. Your vehicle may rust through or experience transmission problems that aren’t covered by a warranty or auto insurance.
Long-term care and unexpected medical emergencies
As you age, your health won’t always be what it is now. You may require surgery, medical treatment, or long-term care after you retire. You may not qualify for Medicaid nor will you always have family to care for you. Make sure you are financially prepared for these expenses if — and when — they arise.
Won’t Medicare cover such expenses for free? Business Insider contributor Liz Froment explains, “Only parts of Medicare are free, and most Medicare recipients pay a monthly premium that can increase for those with high incomes.”
Keep in mind Medicare does not cover long-term or custodial care expenses. Your coverage may not even extend to vision, dental, or prescription drug costs.
Familial care
You’ve budgeted your retirement savings on what it will cost you and your spouse to retire, but what about the rest of your family? Many people don’t anticipate the toll that comes with caring for an elderly parent, sibling, or adult child with a major injury or ailment.
Have conversations with your family members to determine if you need to assist someone who cannot pay for their own living expenses. Investopedia’s financial advisor Amy Fontinelle recommends, “If you can manage it, you may want to budget for a retirement that covers not just your own expenses but also provides for the possibility of assisting someone you love.”
Being better prepared for unforeseen expenses
Now that you’re aware of these costs that may appear on your horizon, you can begin preparing — by budgeting accordingly and finding ways to curb such expenses from happening.
Be proactive by having housing, vehicle, and personal health assessments. Establish an emergency fund so you don’t have to draw from your retirement savings to cover repair expenses. Have conversations with your family members to understand their financial status and possible future care needs.
Better retirement planning now will prepare you for a more comfortable lifestyle well into retirement.