Yahoo Finance I’m Planning My Retirement: 7 Unexpected Costs You Can Avoid Today
Retirement can sneak up on you, and nobody knows this better than Kenny P., a TV producer in his 50s. He thought he had retirement all figured out — then reality hit him like a canceled primetime show.
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Here’s seven unexpected costs that could’ve derailed his golden years, and what he did to avoid them.
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The “My House Is How Old?” Fund
It took Kenny realizing his house was as old as his favorite leather jacket for him to start thinking about future home costs. In fact, he nearly “choked on his coffee” at the realization.
“… I looked at my roof one day and thought, ‘That thing’s gonna need replacing before I’m done working,'” said Kenny.
He started squirreling away cash for home repairs afterward, avoiding a retirement budget nosedive.
The “Ouch, That Doctor Visit Costs What?” Plan
Healthcare expenses can blindside you like a plot twist. After Kenny received a particularly costly bill, he decided to make changes.
“I always knew healthcare was expensive, but those numbers were simply wild,” he said.
He started researching extra insurance to cushion the blow of future medical bills, especially since they’ll only get pricier as he gets older.
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The “I Owe How Much?” Tax Surprise
Taxes in retirement? Kenny hadn’t seen that coming. “I thought I’d be paying less, not more!” he said.
After realizing this, Kenny teamed up with an advisor in an effort to minimize his taxes and keep more of his hard-earned cash.
The “My Kids Are Still My Kids” Reality Check
Even though Kenny’s kids are almost out of the house, he said they still need the Bank of Dad. “I love ’em, but I realized I needed to help them help themselves,” he added.
In addition to being their bank, Kenny gives his kids basic lessons to help them better understand money. By teaching them now and setting them up for financial success, he can protect his retirement tomorrow.
The “Everything Costs More” Awakening
Another big cost — inflation — wasn’t on Kenny’s radar until he noticed his grocery bills creeping up during the pandemic.
“I didn’t want my retirement budget to go out the window because I wanted too many dumplings from Trader Joe’s,” said Kenny.
Keeping inflation in mind, Kenny reviewed and slightly changed his investments to help his money grow with rising prices.
The “Hobbies Aren’t Free” Fund
Kenny dreamed of traveling and picking up new hobbies in his retirement. Then he saw the price tags. “I wanted to see the world, not empty my wallet,” he added.
So, he got creative and found cheaper ways to enjoy life while saving any extra cash for the big adventures.
The “Cars Don’t Last Forever” Realization
It hit Kenny that he’d probably need a new set of wheels (or two) in retirement. “Cars age faster than actors in Hollywood,” he joked.
Considering that cars tend to need routine maintenance in addition to the occasional repair and replacement, Kenny started factoring in vehicle costs into his retirement budget. This way, he has the money ready when he needs it and can avoid a budget breakdown.
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This article originally appeared on GOBankingRates.com: I’m Planning My Retirement: 7 Unexpected Costs You Can Avoid Today
