10 Unexpected Retirement Costs to Think About

Written by Stephanie Lynch

Even if you think you’re the most prepared retiree on the planet, there will still be those pesky unexpected costs that add up over time and may put a burden on your budget.

According to the AARP, retirees fear outliving their savings more than they do death.  Since you don’t want to be this statistic, here are 10 unexpected costs you may have never thought of and may want to prepare for just in case it does happen:

1. Divorce

Even if you feel you’re happily married, you do realize you’re going to be with your spouse a lot more often than you were before.  This could be a good thing, or it could be a disaster waiting to happen.

If you think about it, you probably worked a 9-5 job, leaving you with very little time to spend quality time with your loved one.  While less than 3% of retirees divorce, it’s a situation that could eat up a lot of your assets, especially if you don’t have a prenup.

2. Fraud

Fraud is rampant on the Internet, and if you use it to purchase items, complete bank transactions or send money to friends, you may want to think about the chances of a hacker and/or virus attacking your computer.  Sure, while banks are pretty good at spotting scams and preventing you from sending cash, they can’t do much if you send your money overseas to someone who swindled you.  While the chances are slim, scams have cost some retirees tens of thousands of dollars.  Remember fraud happens outside of the Internet as well, so it’s always best to do your due diligence before sending your money to any organization.

3. Poor Investments

Whether it’s trusting the wrong person or making the wrong investment decision, you’re going to want to take a close look at where your money is invested.  Do you have your money invested in bonds?  CDs? Or is it a tech company that started up yesterday?  While it’s okay to risk your money in your 20s, it isn’t okay to roll the investment dice when you are on the brink of 70 or 80.  Poor investments could easily cost you 10 to 30% of your nest egg.

4. Death of a spouse

This is a sad one, but it can easily happen to anyone in retirement.  Whether your spouse was working a part-time job, had a pension or any sort of other income, you can count on this being affected if your spouse were to pass away.  With this, however, it can be avoided ahead of time if you prepare for this worst case scenario.  For example, if your spouse were to have a pension, what portion would you get?  What about social security?  How would that change?  Be sure to know this so you know how your budget is going to change.

5. Family emergencies

If you have grown kids, what happens if a family emergency were to happen?  Would you be willing to help financially?  For example, let’s say they lost their car because it needed a new engine, and without a new one, they can’t make it to their jobs.  There could be some situations such as these that could potentially cost your budget thousands of dollars.

6. Drop in home value

While we can’t predict the future, what happens if your home is worth 25% less than what it is today?  If you plan on downgrading in the future and taking some of that equity, you may be hurting if your value isn’t what you think it will be worth in the future.

7. Dental expenses

Sure, you will be covered by Medicare and a supplemental insurance if you so choose, but what happens if you don’t have any dental insurance?  The average root canal can cost you a few thousand dollars, while a few cleanings and a new crown can cost close to that figure as well.  We all know our teeth won’t get any better as we age, so it’s best to budget for those unexpected dental bills.

8. Home repairs

As your home ages, it’s going to increase the chances of replacing big name items such as the roof, air conditioner, water heater and if it’s old enough – maybe the plumbing and electrical.  Regardless of how old your home is, you will want to make sure you have a budget set aside to be prepared to pay for a $6,000 new roof or $1,200 water heater.

9. Expect tax changes

We can’t assume the tax code will stay the same forever; in fact, if we look at that past, we can only assume it won’t.  If any of your investments are affected by taxes, what happen if these taxes increased 5, 10 or 20%?  Would it hurt your budget?  For example, qualified dividends aren’t taxed for the first $74,900 if you’re married filing jointly.  What happens if the government wants to tax these dividends like income?

10. Unexpected travel

While you may plan on traveling throughout retirement, you have to think about unexpected travel such as weddings, a funeral or some event that you don’t want to miss.   As you know, an airline ticket, hotel room and rental car can easily cost you $2,000.

Retirement can often last you 30 years or more, and with this long journey will come this unexpected costs.  As long as you make room in your budget for these surprising costs, there’s no reason you have to toss and turn thinking about how the bill will be paid.

Retirement Road Trips – Six Steps to Memorable Extended Travel

Written by Joe Bruner

Confident in the belief that life was about more than the career that I enjoyed, I retired on August 13, 2015 with the intent to begin the next chapter of a life well lived.  To be sure, I would miss all of the things that everyone mentions when leaving the work force—the friends, the challenges, the structure—but I never worried about being bored.  In the years leading up to retirement, I grew increasingly excited about the opportunities that lay ahead. There were books I wanted to read, a camera I wanted to use, stories I wanted to write, and, most importantly, vast stretches of America that I wanted to see.

Three days after retiring, my adorable wife and I left on the first of three extended road trips, each trip lasting a month or longer, and returning after every one genuinely grateful for the experience and eager to plan another.  We are certain there are many others in or nearing retirement with plans for extended travel at the top of their bucket list so, with that in mind, we want to share some of the lessons we learned which helped to make our experiences both memorable and rewarding.

Commitment

Before you make the plans for an extended road trip ask yourself some very probing questions. Can you live without the weekly golf match with the guys or the bridge luncheon with the girls? What about that fabulous birthday party in three weeks that is going to include everyone? Will I really enjoy being that far from the comforts of home? We had those questions and then some.  A recent survey showed that 60% of husbands wanted to spend more time with their spouse in retirement, but only 43% of wives felt the same.  Would Helen (adorable wife) survive with me stuck to her side for five weeks? Wanting to make this road trip so badly, I was almost afraid to ask, but I did and we had a serious discussion about it. Helen is a busy person and frankly, I was surprised (and thrilled) when she exclaimed enthusiastically “I’m all in”.  This is essential to success, so be sure you’re both committed.

Plan

A thorough plan takes time but it can be as exciting as the trip itself. We started planning almost two months out by selecting the region of the country and the cities we wanted to visit. We found Google Maps to be very helpful in calculating travel distances and selecting routes. Regardless of whether your preference is for campgrounds, motels, or even bed and breakfast inns, you should make confirmed reservations.  Once you’re on the road, your plans may change, and you can adjust accordingly, but having a confirmed reservation is a great comfort.  Reviews on Trip Advisor served as our guide for reservations. Two tips might prove useful; (1) Travel after school starts, usually around the middle of August when the crowds are reduced significantly and; (2) organize everything into a loose leaf notebook according to the cities you plan to visit.  We had a tab for each stop that included a hard copy of each reservation confirmation as well as magazine and newspaper articles about things to do in the area.  Add a couple of sheets of loose leaf notebook paper to each tab for notes.  It helps when submitting reviews on Trip Advisor for good (and bad) service for future travelers.

joe-and-helen-bruner-mackinac-island

Don’t Overdo It

On our first trip, we had so much energy and excitement flowing through us that we wanted to do it all. We were in Kure Beach, NC and had made two sightseeing trips two days in a row. In addition, we were having a hard time passing up all of the enticing places to eat and drink. At that point we realized that doing it all was impossible. We were near exhaustion and still had four weeks to go. Out of that weariness, two principal guidelines for extended road travel were born.  First, we would limit ourselves to no more than one major sightseeing excursion and one eating experience per day. We broke with this principle rarely. Second, we planned one or two “down days” where all travel activities were suspended. This gave us the chance to stretch the legs, catch up on email, do laundry, make trip notes and even pay bills.  Both guidelines kept us fresh and energized.

Don’t Fret Over Wardrobe

We discovered on about the second week that no one knows that you wore the same outfit last week. I found that I needed a good rain jacket, three pair of cargo pants (great for cell phone, receipts, maps, etc.), comfortable shoes and some golf shirts. I did pack one nice, dressy pants and shirt combo, but never used it. Helen’s advice is much the same—comfy shoes and comfy clothes— and make that suitcase as light as possible.

Senior Discounts are Plentiful

Travel can be expensive so we did a little research and found that businesses love giving discounts to Senior Citizens. With a little digging, I came up with almost three pages of discounts on food, lodging, and services that are there for the taking. Sometimes a cashier will give it without being asked (gray hair helps), but most of the time you have ask, so don’t be bashful…it pays off. The best discount of all is the National Park Senior Pass that permits the pass holder to bring three adults into a National Park for free for a lifetime. The pass is available to anyone over 62 for a one-time fee of ten dollars. The pass may only be purchased at a National Park (no mail or online purchase).  We rarely pass a National Park when traveling. Be sure and get a National Park Passport also. Collecting the stamps for each park is a lot of fun.

Roads Less Traveled

America is a place of staggering beauty. Without a doubt, the best way to see it is by traveling the roads that take you through the small towns and villages that make our country so unique. Our road trips took us through New York, Chicago, and Washington, D.C, but those can be busy and expensive places. Finding parking can sometimes be a challenge.  Some of our most memorable experiences however, were in towns like Beaufort, NC, Solomon’s Island, MD, Grey Eagle, MN, or Bayfield, WI. There is much to learn and do in small town America so stop, visit a Farmer’s Market, browse through the shops (we love antique shops and flea markets), taste the wonderful food of the region or walk through a park and introduce yourself to someone. If you’re fortunate, you may find a local festival underway where you can really get a feel for the culture like the one we found one this summer in International Falls, MN.

There is a lot of country out there just waiting to be seen and you’ve earned the opportunity to explore it all. We sincerely hope we have given a little help and insight to those of you with plans for extended travel in your “Golden Years”.  We especially hope that the first road trip is successful and leads to many more.  So, slow down and put away that smartphone, take the first exit off the interstate, and hit the road less traveled.

It’s only the beginning, but we’re happily Easin’ Along now…hopefully we’ll see you along the way.

Joe Bruner retired from a career in the home building industry and a career as an officer in the US Army Reserve.  He and his wife Helen live in Knoxville, Tennessee. They have written extensive articles about their travels on their website Easin’ Along (www.easingalong.com).