Recent Core Bridge Financial investigation, Most Americans expect to retire at age 60 and live to be 100.People are given 40 years to retire, but only 36% are confident they have enough retirement savings to last them until they die. The reality of retirement planning You may live longer than expected, which means you need to save more money and be more diligent with your investments.
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When planning for retirement, you calculate your expenses so that you can enjoy your retirement years. Retirees may not realize that there are some unexpected expenses that may come up. Below are some hidden costs that retirees may find themselves facing:
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Unanticipated severance costs
Here’s an unexpected expense from one anonymous retiree who found himself spending more money than he originally planned.
1. Childcare costs
“I have clients who have been tasked with raising their grandchildren,” says Elizabeth Buffaldi, CFP and founder. Crescendo Financial Planner“Instead of traveling, they’re paying for admission to museums and amusement parks and lunches with their grandchildren.”
You might think retirement will be full of travel and adventure, but you might end up babysitting when your kids ask for help. As a grandparent, it can be hard to turn down requests for help and you’ll end up spending money on different activities for your kids.
This expense is unexpected because, while you were working, you likely didn’t have the time to care for your grandchildren full-time. In this case, the retiree in question is spending more on entertaining their kids than they expected. Also, costs can add up when they start bringing their kids’ friends to activities.
2. Financial Advice Fees
“Another expense that my clients didn’t anticipate was hiring a financial advisor,” Buffaldi points out. “I’ve had several clients decide they needed financial help because all of the decisions were so overwhelming.”
If you want to enjoy your retirement and not stress about money, consider hiring a professional. But you’ll soon find that spending money on financial advice on estate planning, investments, and other issues isn’t cheap. When you were working, you probably didn’t think about this expense because you were focused on setting up an investment portfolio and growing your funds. Now that you’re retired, you might spend more on financial advice.
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Advice on post-retirement planning
While there’s no crystal ball to help you anticipate the unexpected when calculating your retirement expenses (and health care costs), you should think through as many possible scenarios as possible.
Think about the support you need
You may not have as much energy as you did when you were younger, so you need to consider what other help you need. You may also not want to do certain tasks now that you have more free time to do what you want.
Here are some questions to ask yourself:
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Do you have health or mobility issues that require you to remodel your home or move to a different one?
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Need a caregiver, cleaner or lawn care service?
Consider your lifestyle expectations
“Think about what you want to do, what your parents are doing, what your friends are doing,” Buffaldi said.
As you approach retirement, you’ll need to consider your lifestyle expectations and potential expenses. It’s important to be prepared so you aren’t surprised by unexpected costs.
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