Watch Out for These Surprise Retirement Expenses

Watch Out for These Surprise Retirement Expenses

Senior man giving woman piggyback rideMost people can be hesitant to retire from their job. The monthly income to which you’ve become accustomed is gone, and it is replaced by distributions from your retirement accounts. Hopefully years of sound planning for retirement will pay off, and you’ll transition smoothly into this new time in your life. But since it’s best to anticipate and plan for any scenario before it happens, watch out for these surprises in retirement.

Budget surprises. Remember not to create only a monthly budget, but an annual one as well. We do this because there may be expenses which can pop up unexpectedly on occasion, like home repairs or larger-than-usual medical bills. Leave a little room in your annual budget for these surprises.

Portfolio surprises. A major change in your life, such as retirement, may warrant a change in how your portfolio is structured. You always want your investments to match up to your current goals and expectations. So when you retire, schedule an appointment with your insurance professional to be sure your portfolio is diversified appropriately for your new budget and lifestyle.

Inflation. You decided upon a savings goal years ago, with an expected retirement budget in mind. Now you’ve retired and discover that your money doesn’t go as far as you imagined it would. Yikes! Prevent this unpleasant surprise by updating your savings goal and expected budget before you retire, rather than scrambling to adjust it afterward.

Living longer than you expected. Generally, a long life is a good thing! But if you live much longer than you had expected, you could outlive your retirement savings. When you formulate your plan, keep in mind that people are now living longer lives than ever before, and leave room in your budget to extend your retirement by several years if necessary.

Losing money to a con artist. Unfortunately, many con artists target retirees for their unscrupulous scam activities. Remember that if something sounds too good to be true, it probably is. Maintain a trusting relationship with your insurance professional, and avoid anyone who makes wild promises to increase the size of your life savings with suspicious “investments”.