Critter Corner: Retirement Expenses You May Not Think About

Dear Angel,

My husband and I are planning for retirement and trying to figure out our expenses. We have considered fun expenses, such as travel and hobbies and many not-so-fun expenses, including health care, day-to-day bills, mortgage, and many other things. Are there any common expenses that seniors sometimes don’t think about when planning for retirement?

Thanks for your help!

Missy Ng-Somthinn

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Dear Missy,

Planning for retirement takes a lot of hard work, and there are many factors to consider as you’re saving. However, no matter how much you prepare for retirement, you’ll never be able to predict with 100% accuracy how much you’ll spend. But there are a few expenses that may slip your mind, and if you don’t account for them, it could seriously cost you in the long run.

1. Long-term care
Long-term care, such as nursing home care, is often forgotten when planning for retirement, but shouldn’t be. Long-term care is typically the most expensive cost you’ll face in retirement, yet many individuals, and even many financial planners, fail to plan for how to cover the costs of long-term care. The median cost of nursing home care in the DC Metro Area is now $11,467 a month for a semi-private room in a nursing home, according to the 2019 Genworth Cost of Care Study. And if you think you won’t need to worry about it, keep in mind that approximately 70% of retirees will need long-term care at some point!

2. Household repairs and renovations
As you’re creating a retirement budget, you’re likely accounting for everyday costs such as mortgage and utilities. But you’ll also inevitably have to deal with home repairs and renovations, and these costs can take a serious bite out of your budget. The average person age 65 and older spends roughly $2,300 per year on home maintenance and repairs, according to the U.S. Bureau of Labor Statistics, a significant amount for those living on a fixed income. Then if you encounter any major expenses – such as basement floods or roof repair – those costs can potentially wreck your retirement if you’re not prepared for them.

3. Caring for other family members
Retirement is supposed to be a time when you can relax and focus on yourself, but many retirees spend their golden years helping care for someone else.

Before you retire, think about how much you’re willing and able to help family members. If you do plan to help your family financially, make sure you budget for that the best you can so you’re not putting your savings at risk.

Hope this is helpful,

Angel