Saving for retirement is incredibly important. Indeed, there will come a point where working is no longer practical, feasible, or enjoyable; however, having a source of income and financial support will be necessary in order to stop working. As people think about retirement planning, they usually consider all of the basic expenses they’ll face, like healthcare and living expenses. However, there are also a few costs that are commonly overlooked. Consider this list of a few retirement costs that might surprise you, and then reach out to our retirement planning professionals at Harvest Financial Planning, LLC for help saving for retirement–
Home Renovations and Repairs
Most Americans plan to downgrade to a smaller home when they age, which will, theoretically, reduce home maintenance and care costs. However, it’s common for people to forget about the costs of home repairs and home renovations, including costs associated with remodeling a home to make it “age in place” friendly. This means that your nest egg for home costs probably needs to be more robust than you were originally planning for.
Have you planned for how much getting around in your old age may cost you? You may not think that you’ll drive much but, according to a Consumer Expenditure Survey, most households where the head of household is between 65-74 years of age spent just shy of $9,000 per year on transportation costs.
If you thought that the day would come when your adult children would start covering some of your costs and you’d be off the hook for theirs, think again – a large percentage of parents age 60 and older have provided support to an adult child in the past 12 months (if trends from years past have repeated themselves). You may be lending out more money to your adult children than you planned for.
Think that you won’t have to pay taxes when you’re retired? Think again. If you have an IRA or 401(k), you’ll need to pay taxes on the money that you deduct (in most cases). Also, if you’re still working during retirement, you’ll also need to pay taxes on any income.
Planning for Retirement with a Financial Planner
Smart planning for retirement often means working with a financial planner who can help you to consider all costs that you may face once you reach retirement age, not just the obvious ones. At Harvest Financial Planning, LLC, we want you to have a retirement that’s comfortable, not stressful. To learn more about saving for retirement and how much you’ll likely need once you stop working, call our team today or reach out to us online. We offer free initial consultations.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.