Crafting a financial plan for retirement: 5 expenses to remember
RetireKey Takeaways:
- The average 65+ household in the U.S. spends nearly $50,000 a year.
- Some expenses may rise as you age, such as home renovations to address mobility, and costs related to long-term care.
- 401(k)s, IRAs, pensions and Social Security benefits are all taxable; a plan for paying those taxes should be a part of any retirement budget.
Did you know the average household of those older than 65 spends nearly $50,000 per year?1 As you approach life after work, don’t forget to plan for these 5 retirement expenses.
As you map out your retirement savings plan, talk to a financial advisor about expenses you should expect and how to make the best plan for your golden years.
Citations:
1 MarketWatch: “This is exactly how much it will cost to retire well in every state in America” by Catey Hill, July 2, 2019 https://www.marketwatch.com/story/this-is-exactly-how-much-it-will-cost-to-retire-well-in-every-state-in-america-2019-06-19
2 Angie’s list: “7 Warning Signs You Need a New Roof” by John Rogers, June 4, 2015 https://www.angieslist.com/articles/7-warning-signs-you-need-new-roof.htm
3 Transamerica Center for Retirement Studies: “How Today’s Retirees Are Financially Faring in Retirement” December, 2018 https://www.transamericacenter.org/docs/default-source/retirees-survey/tcrs2018_sr_retirees_survey_financially_faring.pdf
4 U.S. News: “10 Costs to Include in Your Retirement Budget; Medicare premiums” by Emily Brandon, February 24, 2020 https://money.usnews.com/money/retirement/slideshows/10-costs-to-include-in-your-retirement-budget?slide=3
5 U.S. News: “10 Costs to Include in Your Retirement Budget; Health Care” by Emily Brandon, February 24, 2020 https://money.usnews.com/money/retirement/slideshows/10-costs-to-include-in-your-retirement-budget?slide=4
6 U.S. News: “10 Costs to Include in Your Retirement Budget; Taxes” by Emily Brandon, February 24, 2020 https://money.usnews.com/money/retirement/slideshows/10-costs-to-include-in-your-retirement-budget?slide=5
7 FINRA: “Taxation of Retirement Income” https://www.finra.org/investors/learn-to-invest/types-investments/retirement/managing-retirement-income/taxation-retirement-income
8 CFP: “8 ways to reduce the tax bite during retirement” by J.J. Burns, September 6, 2017 https://www.letsmakeaplan.org/financial-topics/articles/tax-planning/8-ways-to-reduce-the-tax-bite-during-retirement
9 NewRetirement: “8 Retirement Costs Overlooked by a Majority of Americans” by Will Kenton, June 23, 2020 https://www.newretirement.com/retirement/overlooked-retirement-costs/
10 LIMRA: “Even When Inflation is Low, it's Higher for Retirees” April 19,2016 https://www.limra.com/en/newsroom/industry-trends/2016/even-when-inflation-is-low-its-higher-for-retirees/
11 ASPE: “What is the lifetime risk of needing and receiving long-term services and supports?” by Richard Johnson, April 4, 2019 https://aspe.hhs.gov/basic-report/what-lifetime-risk-needing-and-receiving-long-term-services-and-supports
12 John Hancock (2018) The 2018 Cost of Long-Term Care Survey
13 NewRetirement: “8 Retirement Costs Overlooked by a Majority of Americans” by Will Kenton, June 23, 2020 https://www.newretirement.com/retirement/overlooked-retirement-costs/
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