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Crafting a financial plan for retirement: 5 expenses to remember

Retire

Key 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.

 

Infographic detailing the 5 main 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.

 

 

 

 

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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/

 

Financial planning and investment advice provided by John Hancock Personal Financial Services, LLC (“JHPFS”), an SEC registered investment adviser. Investments: not FDIC insured – No Bank Guarantee – May Lose Value. Investing involves risk, including loss of principal, and past performance does not guarantee future results. Diversified portfolios and asset allocation do not guarantee profit or protect against loss. Nothing on this site should be construed to be an offer, solicitation of an offer, or recommendation to buy or sell any security. Before investing, consider your investment objectives and JHPFS’s fees. JHPFS does not provide legal or tax advice and investors should consult with their personal legal and tax advisors prior to purchasing a financial plan or making any investment. 

 

The content of this page is for general information only and is believed to be accurate and reliable as of the posting date, but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made herein.