Retirement is an exciting time for those who have spent decades working. If you are retiring or close to, making sure you have set yourself up for a rewarding retirement is extremely important. Listed below are ideas of four major retirement expenses that you cannot afford to forget. Read on to learn more:
Long-term care is an expense that many plan for, but often times do not save enough for the possible expenses that come with requiring assistance for their personal health. According to Genworth(2016), in the state of Ohio an assisted living facility costs around $44,000 per year while a semi-private room in a nursing home costs around $77,000 and a private room in a nursing home costs around $88,000 per year. Those costs can be astronomical especially if you have not saved properly for these problems that come with getting older. Thinking about purchasing long-term care insurance is an option. Taking care of your body and staying in shape is a great way to put off these expenses as long as you can.
Health Care is one of the largest expenses in a retiree’s budget that increase with age. There is a good chance that facing out-of-pocket fees is a possibility as well paying for extra dental expenses. Unfortunately, as we get older, medical procedures, tests and prescriptions are things that we cannot control. Limiting the costs of health care and in term, long-term care, by living a healthy lifestyle is a great tip.
Discretionary Expenses include: travel, transportation, caring for your family
Traveling is oftentimes a top priority for retirees but being financially prepared to do so is something to be aware of. Traveling is not only an enjoyable activity, but it also has been linked to healthy aging. Some tips about making traveling dreams a reality would be: making a list of all the places you want to see and creating a reasonable budget for each. When creating the budget, do not forget to add in transportation, food and activities. While it is hard to know the exact cost of a trip, estimating costs based off of current prices is a good place to start. For a general budget of all traveling expenses for your retirement, add up all trips and divide by the number of years you expect to travel. If traveling is something you want to do in your future, it is definitely attainable! The key is to make the plan and start saving now.
Transportation is an expense that many do not factor into their retirement budget. Whether you have an older car that is paid off or you buy/lease a new car, don’t forget about insurance, maintenance, repairs and depreciation. A good tip would be to downsize from two cars to one car or even get a bike!
Caring for your family is something that everyone wants to be able to do. It is important to keep a firm balance between caring for your family and being too giving. Making a budget for the year and learning how much money you can give to your family is a good plan. Stick within that budget to feel good about yourself for being an awesome family member but to not be depleting your savings as well.
Housing is an expense that retirees spend up to 45% of their household budget on. Whether it’s utilities, home insurance, furnishings or yard expenses, there is always an alternative option: downsizing. Downsizing can be a great option that would in-turn save money and be less work on you as the homeowner.