Most people put in a lot of effort and save a lot of their hard-earned cash every month for years in order to retire. The quality of that retirement can depend on how much money you save and end up spending.
Costs in retirement are not fixed, and some expenses could ruin your retirement if you're not prepared for them. So while the ability to build wealth is important, knowing what expenses to prepare for is vital.
Here are nine expenses that you can't afford to ignore as you prepare for retirement.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!1 <p>See website for details.</p>
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
Apply for a Discover Cashback Checking account today
Health care (Medicare isn't free)
/images/2023/01/04/nurse-reading-out-to-senior-lady-from-tablet.jpeg)
While contributions to Medicare have been deducted from your paycheck all of your working life, you'll still have to move past uncovered expenses when you enroll in Medicare.
Medicare pays for many medical bills, but you should still expect to pay some costs out of pocket, including premiums and deductibles.
Medicare Part B enrollees can expect to pay a standard monthly premium of over $185 in 2025, according to the Centers for Medicare and Medicaid Services. Inpatient hospitalizations for Medicare Part A enrollees are more costly, with a $1,676 deductible in 2025.
Housing
/images/2023/01/04/couple-standing-together-in-front-of-home.jpeg)
According to the Consumer Expenditures Survey, housing is the number one expense for seniors, running $1,573 per month on average.
Besides a mortgage payment, you'll also need to factor in property taxes, repairs, insurance, utilities, homeowners association fees, and other expenses.
Fortunately, you can take steps to keep housing costs under control during retirement. If possible, consider paying off your mortgage before you stop working. Living in a state with low property taxes and downsizing to a smaller home can also help keep costs to a minimum.
Entertainment
/images/2023/01/04/happy-senior-couple-ready-to-travel.jpeg)
Without the need to work every day, you'll want to find something to do with your time. Entertainment purchases include more than movie admission or a round of golf.
One of the largest entertainment costs for seniors is travel. This may be a regular expense if you relocate away from family and friends.
Average domestic airfare in 2024 was about $382. Plus, you'll need to pay for hotel stays and other travel-related expenses.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
You’ll also get insider info on social security, job listings, caregiving, and retirement planning. And you’ll get access to AARP’s Fraud Watch Network to help you protect your money, as well as tools to help you plan for retirement.
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $15 the first year with auto-renewal.
Food
/images/2023/01/04/group-of-senior-people-eating-in-restaurant.jpeg)
Food is a necessary and ongoing expense, and one of the bedrock rules of frugal living is to eat at home.
However, high inflation rates in 2023 affected all kinds of consumer goods, particularly grocery bills. Food prices rose 5.8%.
Saving money on groceries before you retire and finding ways to supplement your income can help ensure your budget allows for rising food costs in the future.
Transportation
/images/2023/01/04/senior-man-wearing-sunglasses-driving-car.jpeg)
Transportation expenses include gasoline, car payments, car insurance, and maintenance. If you don't have a personal vehicle in retirement, it could mean bus fare or taxi services.
Besides traveling to and from doctor's appointments, you might want to go grocery shopping or out just for fun. Recent increased costs of gasoline affected more than a car fill-up. Higher prices meant that transportation services increased their fares as well.
You can better prepare yourself for transportation costs by entering retirement without an auto loan and factoring in these costs when you plan your budget.
Trending Stories
Long-term care
/images/2023/01/04/stethoscope-with-long-term-care-note-on-book.jpeg)
Medicare doesn't cover most long-term care for seniors. However, many seniors will need long-term care at some point. This usually happens when you can no longer live and care for yourself independently.
If you have a high-deductible health plan, you can open a health savings account (HSA). An HSA works much like a (401)k, allowing you to contribute pre-tax funds to use toward qualified medical costs.
Another option is long-term care insurance, which is sold by private health insurance companies. The younger you are when you take out a policy, the lower your premiums will be.
Child in financial need
/images/2023/01/05/man-advising-teenager.jpg)
Adult children sometimes run into financial difficulty. Helping them with a hundred dollars here and there might not ruin your retirement, but supporting them financially for extended periods of time can.
Even $100 a month adds up to $24,000 over 20 years. That's a lot of extra money to add to your retirement fund, especially when you factor in your own costs of living and inflation.
Helping them with larger expenses can make that number significantly larger, especially as they have a whole household to take care of.
Loss of a spouse
/images/2023/01/04/sad-senior-man-leaning-on-cane.jpeg)
Losing a spouse is emotionally draining, but it can also drain you financially.
If your partner was still working at the time of their death, you could lose an additional income and face a higher tax rate filing as a single. If you were both retired, you will lose their Social Security benefits.
You can financially prepare yourself for the unexpected loss of a spouse by making sure your life insurance is up to date, you have adequate savings, and you're an equal account holder on lines of credit. These steps can lessen the burden in such a crisis.
Taxes
/images/2023/01/04/senior-couple-reviewing-papers.jpeg)
Whether or not you plan to work after retirement, you'll need to pay income tax. Besides tax on your income and retirement account withdrawals (unless all of your money is in a Roth IRA), you might need to pay tax on your retirement benefits as well.
Some states tax retirement benefits, even from Social Security. Knowing the tax laws in the state you plan to retire to will help you create the best financial plan.
In 2023 Americans lost over $10 billion to identity theft and fraud
That's right. According to the FTC, Americans lost over $10 Billion to fraud and identity theft in 2023.
But you can safeguard your data with all-in-one identity theft protection services from Aura which comes with $1,000,000.00 in identity theft insurance2 <p>Identity Theft Insurance underwritten by insurance company subsidiaries or affiliates of American International Group‚ Inc. The description herein is a summary and intended for informational purposes only and does not include all terms‚ conditions and exclusions of the policies described. Please refer to the actual policies for terms‚ conditions‚ and exclusions of coverage. Coverage may not be available in all jurisdictions.</p> per adult, to cover you should you have eligible identity theft-related losses.
An individual plan starts at $9 per month, and you can choose a family plan that outmatches most others - includes Dark Web monitoring to scour data breaches and leaks for your sensitive personal data — such as Social Security numbers (SSN), Medicare information, and phone numbers.
Before you make your next online purchase, protect what you’ve built for a fraction of what it could cost you if your data were compromised.
Bottom line
/images/2023/01/04/senior-woman-writing-on-paper.jpeg)
With the average life expectancy in the U.S. approximately 77.5 years, there's no way to know exactly how long your retirement savings will need to last.
Financially, preparing for retirement is complicated. There are many factors, including inflation, you need to take into account, and no way to accurately predict all the costs you may incur.
You can avoid throwing away your money by managing your expenses in retirement. But saving as early as possible, making a solid retirement plan, and creating a budget can also help you have a comfortable retirement.
FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.
Earn 1% cash back on up to $3,000 in debit card purchases each month.1 <p>See website for details.</p> No minimum deposit or balance. FDIC Insured.
Become a member and enjoy discounts on things like travel, meal deliveries, eyeglasses, and more.
Helps to identify and prevent fraud in real-time with 24/7 U.S.-based support.
Subscribe Today
Want extra-cash moves to come right to you?
Stop browsing endlessly. Get proven ways to earn pocket money, help cover rent, and crush your debt — sent to your inbox daily.
Author Details