(DailyChive.com) – Most Americans spend their working time planning for retirement. Many people find some expenses out of their planning book, even with solid retirement plans. According to the American Society of Pension Professionals and Actuaries, a staggering 56 percent of Americans need help to afford an unplanned expense. These are some of the expenses in retirement that are often overlooked.
Unexpected Home Repairs
Retirement means that one is aging so is the home and everything in it. Sometimes even DIY tasks such as repairing a roof or cleaning gutters might be hard beyond 65. Most retirees depend on their children or grandchildren for help with basic wear and tear tasks. However, one might be needed to pay someone to do the work instead. Some people need to make some exceptional changes due to old age, such as replacing stairs with ramps in case they start using wheelchairs. These tasks might seem effortless initially, but some are recurrent, and some expensive skilled labor might be necessary.
The best way to minimize these costs is to do a home makeover before retirement. Major repairs can be taken care of, and probably budget for any minor repairs that may arise. Downscaling to a smaller retirement home or apartment is also important. It will reduce utility and maintenance costs while still enjoying retirement.
Hobbies and Entertainment
According to a 2021 survey by the U.S Bureau of Labor Statistics, retirees have over seven hours of free time. Many take up new hobbies, relax at home, watch TV, or volunteer. However, the time is too much to spend at home; some prefer going out for movies, plays, lunch, visiting friends and family, and musicals. While these activities seem affordable, retirees have no time to make more money. This means they keep digging in their pockets until a crisis occurs.
It is advisable to create a budget that is inclusive of entertainment expenses and stick to it. Also, most local entertainment joints are affordable, and being a member has many benefits. It is also advisable to avoid impulse buying as it may lead to overspending.
Inflation
One may not be accurate when budgeting for basic commodities, especially in some 10, 20, or 30 years. Inflation in 2022 peaked at 9.1 percent and is expected to remain elevated for some time. Inflation can erode one’s money’s purchasing power pushing the cost of most, if not all, commodities. According to Resume Builder, one in five retirees are likely to get back to work due to high inflation. It is important to factor in inflation when planning for years of spending only.
Adult Children
As a parent, being responsible for one’s children never stops. According to research by Merrill Lynch, 79 percent of retirees support their adult children financially. Many parents help with most basic needs, such as rent, food, car payments, and phone bills. The average cost of this additional spending is estimated at $6,600 annually per child. If such needs arise, moving in with the adult child may help cut the costs while keeping the family close. Some retirees consider giving their cars to their children since they don’t need to drive around more often.
Death of a Spouse
Many people shy from the fact that death is certain. Many people combine income in running their homes; either spouse’s death may significantly impact the financial input. One might even result in going back to work to make ends meet. Some one-time costs, such as funeral costs, can pose a financial burden that might be too heavy to recover from.
Retirement should be the best moment in one’s life. It should be the period you enjoy the fruits of your labor. However, this cannot be without proper planning for everything, including the costs above, which are often overlooked.
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