Retirement is a big chapter in your life and is the reward for a lifetime of hard work. Many people will look forward to retirement and entertain dreams of traveling the country and going on adventures that they never had the time to take before. While retirement can be an exciting and validating time, there can be many surprises that retirees did not anticipate during their retirement planning. We wanted to review 6 factors that can take many retirees by surprise so you can start planning to secure your own retirement.
1. Even in Retirement Your Home Will Be a Large Expense
While your plans for retirement may be paying off your mortgage and using those additional funds to put towards much-anticipated travel, and once in a lifetime activities, your housing will still be one of the largest expenses you will have to worry about during retirement. Even if you have planned well and paid off your mortgage, the upkeep on your home and increasing taxes can still take up a large chunk of your monthly budget. There are also many retirees who move into a larger home for retirement, or even buy a second vacation home, and will have a higher monthly mortgage and expenses to pay.
2. Healthcare Costs Can Be Massive and Take You By Surprise
One of the largest expenses retirees will face, especially in their later years, are healthcare costs. This can account for up to an average of over a quarter of a million dollars. Those with major health problems will incur even more. Ways to help reduce this cost include opening health savings accounts to save during your working years, and of course trying to stay as healthy and active as possible. But with the rising costs of healthcare, retirees should plan to save even more to meet these expenses.
3. You Will Likely Continue to Work
Many people will continue to work into their retirement, but the type of work will often change. Some will use their retirement to launch a new type of career that they have always dreamed of doing, some will work to pay for unexpected expenses, and some will work as a way to get out of the house and meet new people. Retirement is also the time when many people will volunteer for causes that they wish to support.
4. Retirement Can Be Lonely for Some
Some people will experience loneliness when they retire and some may even suffer depression. This is often more common for those who are single, and those who retire farther away from their family. Most often the loneliness will subside as you get further into retirement and begin to participate in more activities and make new friends.
5. Many Retirees Will Feel Younger, Even as They Grow Older
Surprisingly, many retirees which actually feel better, and even younger than they did when they worked. While they may have to deal with more physical ailments as they age, they will not have the day-to-day stress that can come with a job and family responsibilities. Many people will actually find themselves even becoming more active during retirement and enjoy activities they had no time for previously.
6. Retirement Can Last Longer Than Expected
The average retirement age is calculated based on life expectancy with most people assuming that retirement will last around 15 years. With improved healthcare and advancement in medical technology, many people are actually living longer than the national average. Unfortunately, most retirement plans will be based on the average life expectancy, which can leave many retirees short on their finances as they pass this age. In truth, you should probably plan to have your retirement income support your for at least a couple of decades, even 30 years or more, after your planned retirement age.
Don't let retirement deal you any unexpected surprises. Expect the unexpected and plan for the items listed above to give you the best start at creating the retirement you always dreamed of.
Investment Advisory Services offered through EnRich Financial Partners LLC, a Registered Investment Advisor.
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