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Remember How Retirement Has Those Unexpected Costs

If you are reading this article, then you are getting ready to retire. Everyone has a plan or strategy with hopes of retiring and not having to worry about finances once they leave their career behind.

But here’s a couple of quick questions for you.

  • Have you built up your 401(k) enough to not feel the full effects of the stock market? Are you prepared for inflation on an annual basis?
  • Do you have some safer investments – like annuities – where you have lifetime guaranteed income available to supplement your retirement needs?
  • Do you think Social Security will provide enough income – or even be available to you in 5, 10, 20 or even 25+ years?
  • Once you qualify for Medicare, can you afford the monthly payments required for a potential Medicare supplement or prescription drug card?
  • What if you unexpectedly are hospitalized and need long-term care? Can you afford using your retirement budget?
  • Do you have children? Are you going to have the money to support their needs (wedding, home purchase, children) if necessary?

Healthcare & Long-Term Care

Since it’s Long-Term Care Awareness Month in November, let’s start off by talking about those potential bills. By 2025, the American Association of Long-Term Care (AALTCI) expects pricing to increase dramatically with the following averages for Home Health Care ($70,336), Community Care ($68,597), and Nursing Home ($145,763). The average couple who retires at age 65 will need around $285,000 to cover healthcare expenses.

If you were hoping Medicare would cover these bills, Medicare only covers a portion of LTC costs up to 100 days with 20 days provided at no cost and the remaining 80 at a significant co-pay if you are insured. By the way, Medicare costs also tend to rise on an annual basis and most plans do not cover dental care, hearing aids or other healthcare services.

Food & Drink

Let’s say you budget $10 per meal per day in retirement. That leaves you with $30 per day, $900 per month, and $10,950 per year for meals and drinks. Take into consideration that you plan to live for 20 years during retirement. That means you would need $216,000 if you stuck to your budget over that time frame.

Do you know of a restaurant where you can spend $10 on every meal other than the local fast food place? What if you have people over for lunch or dinner on a regular basis? While that number is targeted in your retirement, you have to understand that family gathering, friend visits and more can make that number unrealistic for 20 years. You may need twice as much just for food and drink during retirement!


How many times have you talked about “seeing the world” when you retire? Everyone talks about going to Hawaii, an overseas country, or maybe even a sightseeing trip on one of the coasts. How do you plan to pay for the air fare, hotels, meals, rental cars and gas, souvenirs, and other amenities?

You don’t want to spend all of your retirement money at once with a grand trip of Europe or other destination. The retirement account looks much larger when you first start those golden years, but do you want to have money for the things you may need down the road including unforeseen life events?

Unforeseen Costs

What happens if you decide to stay in your house during your retirement years? Most homes will need some kind of home improvements like a new roof, furnace, driveway/sidewalk, water heater, sump pump, windows or other amenities designed to keep your residence safe and operational.

Basic tasks become more difficult including cutting the lawn, raking leaves, shoveling snow, cleaning gutters, or even other basic cleaning tasks around the house. Can you afford to hire someone to do these chores? You also have to remember the unforeseen accidents – storm damage, broken pipe, etc. – where you may need an emergency fund (meaning your retirement dollars) to cover the damage if insurance doesn’t.

What if your children need assistance buying a car, a house or even paying for college or other services for their children? Do you have a way to take money from your retirement to help them out?

Hopefully, this article provides you with a way to assess your future needs and plan for a retirement where you can leverage a solid financial plan with annuities, investments, and Social Security to pay for all of these potential expenses.

If you would like to know more about annuities, please contact Annuity Alliance and we will align you with a financial professional.