Retirement can be expensive.
Life can throw you a lot of financial curveballs, yes?
These can be difficult, even when you have a steady income.
After you retire, these surprise expenses can be more daunting.
According to a recent The Wall Street Journal article titled “The Expenses People Often Forget When They Plan for Retirement,” it is important to prepare for these potential financial hits.
What are some of these hidden retirement costs?
Furnaces, cars, and roofs wear out.
Retiring does not change this.
When the inevitable happens, it will need to be replaced.
Think Murphy’s Law.
After you retire, your parents may require healthcare assistance and financial support for these expenses.
You may have adult children who fall on hard times.
You may want to assist grandchildren with tuition costs.
When doing so, you cannot neglect your own needs.
Your nest egg may not be able to support everyone else as well as yourself.
Remember the airline briefing about what to do with that little yellow oxygen mask should cabin pressure be suddenly lost.
Required distributions and taxes.
Tax-deferred retirement account must have required minimum distributions taken every year.
You will need to take these starting at RMD at 70½.
These disbursements will be taxed as ordinary income.
These could place you into a higher tax bracket or increase your Medicare Part B premiums.
Preparing financially for retirement can help you survive these unexpected holes in your retirement bucket.
Reference: The Wall Street Journal (Oct. 17, 2019) “The Expenses People Often Forget When They Plan for Retirement”