Once you retire, you will finally have the time to do whatever you want. You might also think that you will get things for less money. While this is most definitely true, there are a few hidden retirement expenses you should be aware of.
Having time and money sounds too good to be true, and this is why you always need to be prepared. Knowing these things beforehand will help you not fall into some of the most common traps or be surprised by how expensive things can be.
So, read on and discover the hidden retirement expenses that will make you spend more money than you initially planned.
1. Travel expenses
Let’s talk more about that free time. OK, now that you are retired, you have plenty of free time to do the things you’ve always wanted to do. This is amazing! One of the most popular activities people choose to do in retirement is to travel.
This is the perfect time to see more of the world and visit your relatives. But one of the things people tend to ignore about all of this is the price tag. Big plans, big price tags. This is how things work.
If you retire at the traditional age of 65, you will probably be pretty active during your first retirement years, which means more travel. And the more you travel, the more money you will spend. This is the catch. Not that travel per se is more expensive, but since you do it more, the sums will add up. This is why traveling is one of the hidden retirement expenses you need to be aware of.
Carefully planning your whole retirement spending plan will help you adjust for higher travel expenses during your early retirement. A smart move would be to make the larger withdrawals early, and when you slow down, you can start with the smaller ones.
2. Housing costs
This is not true for every senior, but there are some contexts in which housing can cost you more during retirement. Now, let’s talk about these special situations.
The first is that you choose to continue staying in your home, but since you got old, there are some things that need to be changed. For example, you may need a few adjustments to your bathroom so you can make sure you will not slip. This whole concept is called aging in place, and it is a great idea for those who want to remain in their homes.
The second one is if you choose to move into an assisted living facility. This is a great choice for those who want to always have access to medical care. Also, the sense of community you can find in such a facility can be beneficial in many ways.
But choosing to live in an assisted living facility will cost you money, and generally, we are talking about big bucks. For example, a senior could pay as much as $3,600 per month for a service like this.
Housing costs are not necessarily hidden retirement expenses, but many times they are expenses people forget to consider. But since we are talking about large amounts of money, you should be more careful about it and think about what you want to do in advance.
3. Entertainment expenses
Having time to do all of the things that you enjoy is incredible, but unfortunately, this comes with some hidden retirement expenses. Besides traveling, entertainment expenses are another thing that can cost you more during retirement.
Maybe when you were carefully building your nest egg, you didn’t think about how much some things, like going to the movies or eating out from time to time, would cost. And this is how you can easily lose some money during retirement.
All of the free time that you have once you retire can make you spend more than needed on various expenses, such as going out and shopping. You might be surprised by this when it happens.
We know that it may be hard to fill that void that develops once you no longer have a regular job, but you should take care and consider that something like spending too much on entertainment can happen. This is one of the most common hidden retirement expenses people tend to completely ignore.
If you want to save money during retirement, you have probably already thought about relocating. But what very few people know is that relocating comes with hidden retirement expenses.
Yes, this strategy will save you money in the long run, but don’t ignore the initial expenses. The moving expenses can get quite pricey, and there might be a chance that you are not ready to pay them.
When you want to make such a big change as this one, you should think about it and plan years in advance. Relocating can get difficult as you get older because nobody wants to injure themselves. You are no longer able to move things as you once were.
This is why you will need to hire a professional moving team. This can cost you, on average, more than $2,500. If you want to try a frugal approach, you can choose to go with hybrid moving. This means you can hire a truck that you will drive, and professionals will do all the heavy lifting.
These are the main hidden retirement expenses we wanted to cover. If you know more about them, you can tell us in the comments section!
If you want to learn more about relocating during retirement, you can try this book: The Perfect Retirement Location Guide: Finding the right town for you!
You should also read: 7 Major Appliances That Aren’t Worth the Money