Retirement expenses are not the same for every person and can look a lot of different ways. Where travel might be on one person’s list to include in retirement spending, eating out multiple times per week might be on another’s list. But often times, the expenses that unexpectedly pop-up are not the ones we wanted.
As part of a know-before-you-go approach, I asked retirees, “What is an unexpected expense you’ve had during your retirement?”
This is what they said.
Mack, Fort Lauderdale, FL, and Asheville, NC
Age – 88
Number of years retired – 8
Mack worked until he was 80 years old. He lived in Florida for the first year of retirement and then moved with his wife (also retired) to Asheville, NC.
Most Surprising Expense
“Prior to retirement, we had very little medical expenses. My wife and I have led a fairly healthy life. Medical expenses were at a minimum.”
“Although we still enjoy good health with no major illnesses, medical expenses above medicare are surprisingly high. For example, over the past few years, we have spent more than $14k on my wife’s teeth. Even with a medical supplemental policy routine along with specialists, doctor office visits add up.”
Our medical expenses:
2015 – $21,068
2016 – $16,589
2017 – $14,719
2018 – $15,855
“Prescription drugs are another expense that is high. One drug alone (blood thinner) cost $150 per month (prescription drugs run about $3,000 per year).”
Gordon, Asheville, NC
Age – 66
Number of years retired – 5
Most Surprising Expense
“Getting married!” Gordon went into his retirement as a bachelor and got married a few years later. Aside from ceremony expenses, the other big one is Social Security benefits. Your benefits might be affected depending on different factors, such as if you are collecting benefits on the record of a former spouse. Contact us to learn more detail on how this might affect you.
Kim, Asheville, NC
Age – 64
Number of years retired – 4 months
Most Surprising Expense
“Physical Therapy.” Kim had a shoulder injury and had to go to physical therapy for weeks. Her full retirement age is 66, so she isn’t drawing from Social Security, yet. Luckily for Kim, she’s covered under COBRA, which paid much of these expenses. Her out-of-pocket cost was $500.
Didi, Pasadena, CA
Age – 66
Number of years retired – 2
Most Surprising Expense
“The following are not really unexpected or surprising, but their scopes are unknown and therefore hard to plan for: Property tax increases, medical expenses, caregiver expenses, home repairs, HOA assessments, and dues increases. You know they’re coming, but you don’t know how much and when!”
Rich, Seattle, WA
Age – 62
Number of years retired – 7
Most Surprising Expense
“Nothing unexpected, yet!” I asked Rich what he attributed to that and he said, “Good planning and research. It’s a huge decision. I went into it with both eyes wide open. I read a lot and talked to a lot of people. I started planning for retirement in my 20’s.”
Carrie, Puerto Vallarta, Mexico via Kingsport, TN
Age – 66
Number of years retired – 4
Most Surprising Expense
“We really haven’t had any expenses that we weren’t expecting!” Like Rich, I asked Carrie what she attributed that to, she said, “Just knowing ahead of time what your expenses will be I guess. Housing, insurance, car(s), groceries, etc. The givens and knowns. Then having more than that coming in each month to cover anything (little) unexpected. But so far nothing major, knock on wood.”
How To Plan for Unexpected Expenses
Life will always be filled with surprises, no matter how much we knock on wood. While you cannot possibly predict every single cost that will occur, there are things you can do to set extra funds aside and be prepared.
A good start would be having a solid understanding of what your current expenses include and being accustomed to living within your means. Are you having to regularly withdraw funds from your savings to pay for expenses? It’s important to save, but it’s equally important to understand the amount you tend to spend.
This is where developing a plan with a Certified Financial Planner™ can be a helpful tool. A CFP has a strong understanding of what these “surprise” expenses can look like and can help ensure specific guidelines are in place.
Have questions? We’re happy to speak with you. Contact Us.