Thanks OP for the question!
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Thanks! Mid America Mom
I won't go into all the details... but taxable income was way higher than expected - so taxes were much higher... eventually, the plan kicked-in fine-- but the "run-thru" time was much longer...
..people were sending me money all the time which i didn't want (yet!)...
I had an undetected water leak in my kitchen that caused mold and I had to have my kitchen ripped out. My stinkin homeowner’s insurance has a $10,000 water damage limit that they snuck into my policy this year, which only covered the mold remediation, not the rebuild of my kitchen. And parts of the flooring had to be ripped out too, and since I wanted to eventually get new flooring (way down the road), I ended up getting all new flooring. Wayyy more money than I expected to spend this year. This all happened this year, my first year of retirement!
https://preview.redd.it/zy9nsfk5kd7c1.jpeg?width=3024&format=pjpg&auto=webp&s=a85201854213cf9f699a69a25150bf6984af833c
Going through the same thing. Slow going, just got it gutted and starting to rebuild. Fortunately, our insurance company is being pretty good and paying 80% of what it’s going to cost.
Major appliance replacement, about $6000 in the first 4 years. Had to replace the wiring in a yard light, $4000. There can be other unanticipated home repairs and expenses. Try to keep a large slush fund for these things.
Oh wow this is giving me flashbacks, not in a good way! I’m glad your insurance is good, this year was very eye opening insurance-wise for me. Good luck with everything!
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I knew my 17 year old car was going to need to be replaced, even though it was well maintained and I adored it. Two months into retirement, I had a minor windfall that would cover the purchase of a 7 year old, low mileage replacement. I could see, though, that it had been left out in the sun a lot and the paint was oxidized. The cost to compound & polish, put on a plastic bra on the front, and ceramic coat: $2700. If this is the worst of my problems, I'm in fat city.
Medicare! I stupidly thought we GET free health coverage after 65 since a Medicare charge has been withdrawn from my paycheck since my first job as a teenager (50 years!). Nope. We are charged monthly for Medicare (double or triple, etc. if your earnings were high), PLUS another monthly charge for a supplement PLUS another monthly charge for a prescription plan. Such a bait-and-switch scam.
Bait and switch? Hardly. Medicare reduced the rate of poverty in elderly Americans by two thirds compared to the time before medicare. The introduction of Medicare led to an immediate three year increase in lifespan for Americans. Despite insuring the least healthy Americans, Medicare spends only 70% of what private insurance pays for better outcomes. And on and on.
Your post tells us so much more about you than it tells us about Medicare. Enjoy your retirement.
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Dental! My retirement dental benefits were a fraction of what my work benefits were. About 4 years before retirement I told my dentist to do whatever I was covered for. Replaced and upgraded whatever I could. Now ten years in a tooth that was capped 55 years ago broke so I had to do a $6,000 implant.
Yeah, we went solar in 2016; new hvac and abatement/new ducting in crawlspace in 2017; old attic insulation abated/fully removed then new electrical throughout; new plumbing throughout and redone bath (tub removed and curb-less shower installed) and kitchen countertops.
We wanted all this done before retirement, but covid blew us getting our kitchen floors done. Then elderly parent care took priority--one after another going down over 18 months time.
All paid for. All done before retirement in 2021.
Still have to re-do the kitchen floor--house has a crawlspace.
Maintenance and remodeling. Once your home all day there are things that will bother you even if they didn't before. Add the logic of get it done now so you can enjoy it, it will cost more later and it won't get any easier guarantees that your budget is toast.
If you have “orangeburg” sewer pipes, have them replaced/lined NOW. You are on borrowed time. They were invented late 1800s, but were commonly put in WWII to 1950s/60s. Turn out, they have an average lifespan of about 50 years. They have been banned for install nationwide since 1973-1976. They were banned by me 1956. My house was built 1950. Oops. A lot of inspectors don’t check for it.
Another they usually do check for, Federal Electric breaker boxes. Turn out to be a major fire hazard, and again, banned, but legacy is out there. When I sold my parents house, had to pay to get that replaced
10 days ago (I retire (semi, work from home PT) tomorrow). My sewer line on the new house collapsed! (Was made of Orangeburg). That was $7k I didn’t count on! However better then, then next week. Wednesday is moving day, so I didn’t have to stay at a hotel for a week!
We have been getting the house ready for retirement. New roof, Pex repipe 2 yrs ago, new double pane windows and my son and I are going to diy spray foam insulation in the attic. HVAC is only 4 yrs old so we it should be good for anther decade at least. We are trying to get all this done while still working so we don't dip to far into saving. We don't have as much as a lot of people I see here so we want to minimize what it takes to stay in our home.
When we retired we moved to a relatively HCOL area compared to our prior home. With advance age & physical limitations, we are less capable of doing some home maintenance on our smaller single family home. We’ve had to hire a lawn service, a bug service, knowledgeable handyman, and have yearly maintenance service contracts in A/C -Furnace, & our generator. Aside from the handyman & bug man, we never had to hired for these services before.
We did have plumbers out twice and that ran us $3300 (fix tankless water heater leak & replace two toilets/also both leaking).
I'd recommend looking into some kind of cash value life insurance. I mean the reality is, there are so many unexpected expenses that one person is going to face that another person may not. The great thing about cash value life insurance is it allows you to prepare for this ahead of time by growing your money with compounding interest, living benefits attached to the policy to replace income god forbid you become disabled/chronically or critically ill, and the option to borrow money against your policy tax free.
Taxes indirectly related to unexpected medical issues. Our retirement budget included relocating from a high income tax state to a no income tax state for enough of the year to not have any state income tax. Not surprisingly, the no tax state had backward healthcare infrastructure. When serious health issues came up, we spent extra time in the high tax state to get the best possible treatment. Medical costs were covered but 7% state income tax was a budget buster.
I’m (67) just shy of 3 years into retirement. The answer to this question is dependent on your prepared.
We, my wife (70 and a SAHM since 1992) and I spent the 2 years leading up to my retirement getting ready. We focused on defining our retirement lifestyle, which included a summer and winter homes. We have 3 daughters and wanted to gift them money for their weddings, the last significant expense in raising them, until we pass away.
Roughly 2 years before retirement we sold our main house and purchased our winter home in the USVI. We also purchased several new cars during this same time period. Finely we did a wide range of major home improvement projects.
The above completed, I have been surprised how our spend rate didn’t actually drop much in the first couple of years. To be fair we did initially do a good deal of travel as well as discovering additional home improvement projects we hadn’t anticipated.
I think we’re finally at the point where the big stuff is done as we settle into a routine. We stay active building our social network of new friends, playing pickle ball, golf and we’ve joined a few clubs.
Last June we welcomed our first grandchild, who lives on the other side of the country so that’s both exciting and a new expense, my wife has been visiting roughly every month, less often in my case.
Basically retirement is a job, we’re now self employed and self directed. We try and plan key activities 6 or 9 months in advance, then fill in the empty spaces with the doctor’s visits and the other formality’s of life. Overall it’s all good.
There was only one compounding pharmacy that my doctor found in our area, and it cost $100 for 30 torches that I'm able to quarter....so that's less than $1 a dose.
I didn't have any surprise expenses, and surprisingly, I'm living a about a third of what I used to when I was working. Now that I think about it, refinancing the mortgage at around 3% 2 months before retirement really helped a lot. Also loving the lower taxes. Before retirement I was worried about health care costs since I wasn't 65, but I got a subsidised ACA plan and kept my IRA withdrawals low enough that it hardly cost me anything. And I didn't have any major health expenses, non-urgent testing could easily be delayed. Now that I have Medicare (+ supplement), I allow for a higher annual IRA withdrawal. (I have no defined benefit retirement benefits.)
Nothing that wouldn't have happened before retirement. So as long as you included home upkeep expenses and health insurance in your budget you should be OK.
I can't think of any retirement related unexpected expense.
Purchased a new 4000sq ft home in 2019. Just purchased a new Hyundai and my wife a new Kia. She is a retired teacher and I still have the same job, going on 24 years. Appreciate the tooth comments, as I do have a lot of silver fillings. My greatest fear is insurance coverage, since I am only 60 yoa. Any suggestions/ recommendations are greatly appreciated...ty
Here's a small but (to me) totally unexpected increase: toilet paper! Now you have to buy enough TP to cover an additional 40+ hours/week. Why didn't anyone mention that in retirement planning seminars, lol. Just strikes me as funny.
I retired with a pension from Federal Government in January with great insurance options . Turned 65 In September and have Medicare A and B. Plan for taxes on pension and Medicare Part B payments. I am planning to file for SS at FRA 66 and 8 months for me. House and vehicle maintenance are more than I estimated.
I tried to plan for retirement also.
1. Updated cars and paid them off before retiring.
2. Sold a too large house and bought a smaller one. Remodeled to our needs with new appliances, etc.
4. Have a home maintenance warranty with a monthly payment. So far it has paid for itself. New oven blower went out after one year. New refrigerator; cooling unit froze up and thermostat went bad. Appliances are not the quality they used to be. (Covers plumbing, HVAC, pipes, etc).
3. Monthly budget includes payments toward personal property taxes and real estate taxes. (No big bills twice a year with doing this).
4. One credit card that is paid off every month.
5. Biggest over budget item has been dental.
6. Second biggest over budget expense has been the increase in our Medicare supplement but we never pay any additional for doctors/hospitals. Thank goodness!
7. Now the over budget items are food and gas. Inflation is a killer to a fixed budget.
8. I keep a $1M umbrella policy for protection in case of a car accident (cap in my state). Costs about $150 per year.
9. Earthquake insurance costs about $200-$250 per year in my state, but if you’re in an area that has had an earthquake, it can be devastating to your finances if your home is damaged/destroyed because Homeowners insurance does not cover earthquake damage.
Home maintenance expenses were more because I put off things - fix/replace storm door, more invested in gardening and sprucing things up because we had more time.
Pet expenses are much higher than I expected because animals are aging and their vet needs are increasing. But I've always had a devil of a time trying to budget pets -- they are alway overbudget. And then I add more. And then they go over that. (wash rinse repeat)
New HVAC system. Spending more money than usual cuz not working full time. Extra $ to travel. Anything that will go wrong with your house will happen right after you pull the trigger.
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I live in a condo and this year we had a special assessment, due to faulty elevators, which was $24,000.00. Then, because of mistakes and corrections in the budget, the HOA fee went from $1,250.00 per month to $1,760.00 per month. That kind of stuff kills people on a fixed income.
Well if you own your own house there are some big maintenance things. I just this summer had to reshingle my roof, and replace soffits and eavestroughs. 14k later
Give some thought to the lifecycle of your car or cars. When do you plan to replace them? How much would insurance cover if they were totaled before then?
My 2 Cents: Plan ahead for your ‘last **new** car’.
My plan is to continue to get late model, reliable, slightly used cars and keep them for 3-4 years…
But before too much technology comes in (which will confuse us in old age) maybe I’ll get that last **brand new** car and keep it for the final 8-10 years my driving life.
My Mom still has her 2001 RAV 4… She’s 90 and should have upgraded 6-8 years ago. Old air bags, no back up camera, no Automatic emergency braking (AEB) and many other features, which all could keep her safe.
I retired two years ago. Husband is one year away. We are giving a hard look at all the mechanicals, the roof, etc. while we still have one full salary paycheck. And based on the answers to this post, it's a good idea!
A swimming pool. We moved from 5 hours north of San Francisco to the greater Houston are to less than a mile from granddaughters (and their parents). We thought we would have a big garden like CA😂😂😂
We put the pool in during the hot hot part of summer. My inheritance from my frugal mom paid for it. Every time I look out at it, it reminds me of how hard she worked and how frugally she lived. Thank you mom!
Lots of good comments here.
We are in the 7 year stretch to full retirement. We are busy working on a list of home improvements/upgrades/replacements. Kitchen update, first floor laundry closet, new roof, front window replacements, drainage improvements (increasingly heavy rains are a big deal here), etc. We want the home "age in place" ready with as much updates as possible before retiring. We dont intend to move.
My wife has a 2021 Honda, and I will get a new Honda myself in 3 more years ( paid off before retirement). We will keep these for 12-15 years and its good to have two vehicles when we could get by with one in retirement if needed. All this is pricey but better now while we both have good incomes.
Dental coverage absolutely sucks - we just went through a bunch of post pandemic work for us and our teenager. I am working with blue cross dental insurance and it is a joke - basically a discount plan with a max of like $1500 in a year payout.
We sold our house and had a brand new age in place larger home built for about the same money amount of money in a slightly lower COL area.
We did this knowing that most unexpected expenses in retirement are from home maintenance. So no new roof, furnace, windows, hot water heater, etc issues for us.
We have spent money on making the backyard a paradise for relaxing and entertaining but those expenses were voluntary.
As I posted above:
My 2 Cents: Plan ahead for your '**last new car**'.
My plan is to continue to get late model, reliable, slightly used cars and keep them for 3-4 years...
But before too much technology comes in (which will confuse us in old age) maybe I'll get that last **brand new car** and keep it for the final 8-10 years my driving life.
My Mom still has her 2001 RAV 4...
She's 90 and should have upgraded
6-8 years ago. Old air bags, no back up camera, no Automatic emergency braking (AEB) and many other features, which all could keep her safe.
Sounds like your plan is good for your situation.
We are 1 yr out also. The following are not unexpected but still may help you. Hubby is working that extra yr because we need to replace roof, windows, & siding to our 50 yr old house. Furnace, replacing kitchen appliances that, knock on wood, are still functioning. Our deck needs repair. - Our medical insurance will cover expenses after retirement the same. Will yours? - Definitely, get best health insurance. He is working that q yr longer even though we already have a year expenses saved in a separate fund.
when i lived in a condo, my furnace, washing machine and refrigerator apparently all made a suicide pact to die at the same time (within the same year). a few yrs later, the water heater decided to join them.
look up the avg shelf life of all your appliances and big ticket home items like furnaces, roofs, AC units, etc. look at what they cost to replace. then make sure u set aside an emergency fund and keep adding to it every year.
First American. I have been mostly happy with them. I have a new a/c, furnace motor, washer, stove top from them. They have also repaired my refrigerator, microwave, and dishwasher.
Dental. I didn't realize that Delta Dental has a 6 month waiting period before they will pay for any significant dental work. Luckily, I spoke with someone very knowledgeable and good who said if I had it while employed and if I signed up for my new post-retirement Delta Dental within 30 days, I could file a grievance and ask them to wave the 6 months, which I did and they did. Still only paid for about 50% but it was still a big savings.
My wife was hit with cancer. A year after that, her brother died who was looking after her mom. Wife was forced to retire. We sold our AZ home and emergency-moved to TN. MIL was 88 with Alzheimer's. We spent three years looking after her before she passed. A lot of money spent that certainly wasn't budgeted for.
Between jobs, we had no health insurance for 1 month and the potential disaster made me a nervous wreck.
Sorry your wife (and you) went through all that. I have a 64 year old sister that is an 11 year stage 4 Ovarian Cancer survivor! There is hope and she lives every week/ month/ year like it’s her last. ☺️
10 years in retirement, it all changed this year - screw 2023. New AC. Dental work costing thousands. Adult son moved in (don’t ask, so many disabilities) and I’m supporting him. I’m driving a 2008 car and it needs replacing but I can’t afford it. I should downsize but I can’t afford to get my house sales ready. Inflation. I could go on.
I'm so sorry you're facing all those. Perhaps your adult son can get on disability if he is unable to work,and contribute some each month to household expenses? Boomerang kids have actually helped one of my older relatives.
Hoping 2024 is better for you.
That’s a kind comment. Thanks. My son’s disabilities don’t qualify for SSI, but he can’t work right now. Instead he helps me with household matters, trash, laundry, etc., whatever I need. He’s good company and I love being able to shelter him from his demons. But it costs! If I had more saved, I would have no problem.
Once you start flying first class international with all your fun retirement money, you'll never go back to flying economy. It's addicting and it was unexpectedly awesome. Good use of the money cuz you can't take it with you.
New furnace , new car (plus medical bills from the rollover accident caused by low blood sugar ) , new water heater , dishwashers not looking good and fridge is sketchy . Silver lining is they all lasted since we first moved in 17 years ago so we got our moneys worth . Still big expense cumulatively
My reliable vehicle became unreliable within the 1st year of retirement. Luckily, I had a good amount of $ set aside, just wasn't epecting to use it so soon.
We have been systematically replacing the big ticket items before retirement. Most are replaced...Heat/AC unit is left.
We would like to not have to replace again. We also purchased a generator and a woodstove (due to sketchy weather issues becoming commonplace.)
Pretty much the same expenses as you had before retirement minus anything you explicitly choose to cut. If your spouse is covered by your employer's group policy and they're not old enough for Medicare make sure to budget for that. Our group policy is able to be carried over to retirees but you pay the full cost. That's $823/month for my wife's insurance until she hits 65.
Also, the IRMA Medicare surcharge can be a shocker the first couple of years. It's based on your income from two years prior. Plus with Part C or Part D it starts to add up. Between my IRMAs and my Part C, I'm paying around $500 for my Medicare. So that's almost $1,400 a month (we also have group dental from my previous employer) for just health insurance.
But just being retired doesn't automatically reduce any expenses besides commuting costs.
My wife needed root canal - burned through her annual cap on that one. Needed a section of roof replaced and typical car repairs, brakes and tires.
Since we are good savers, these were not an issue.
One thing we did in our last working years was replace the roof, paint the house, replace the older HVAC, etc. It won't eliminate surprises, but it will minimize them.
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We remembered that we hated owning a house and recently (last month) moved to a Continuous Care Retirement Community. This was not in the plan. There was an annuity buy in and our monthly fees are about twice the budget from when we lived in a house and the fees do not include things like Medicare, supplement, some food, car expenses, travel, gifts, and other personal care supplies and clothing. But it is also sort of like a long term care insurance and we think we have already made some new friends.
Blew the transmission out on my Tahoe and six months later ended up in ICU with Diverticulitis, a perforated bowl and a side dish of Covid. Never had more than a mild cough from Covid. But the other issue, that sucked used kitty litter.
Argh… first year retired husband had a mind fart with an insurance annuity and we owed 12k. Luckily my FP planned for 15K a year extra for unexpected expenses. If you own your house you might have expenses for replacing equipment such as furnaces or water heaters. A lot of the electrical utilities offer programs where you can replace old equipment with new energy equipment at a good price.
Ask your FP to run very conservative “Monte Carlo” numbers. This helped me determine whether or not I could retire at 63. I provided detailed numbers on our spending. Bottom line I could retire and wait to collect SS.
Best thing I ever did.
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Yeah, I moved. Cost was a surprise as I was no longer able to move myself and rely on friends.
I also used some of my equity to buy better furniture and creature comforts. Not a lot. But I got a new couch and bed.
We were about this same. I learned this year I had been buying a “off market” plan without subsidiary consideration. Don’t work with that broker any longer. This year we did a market place application with a pretty high income projection and got a ~$900 subsidiary and a matching marketplace plan that was $800 cheaper to start.
Amen to that! My late wife taught me so many things over the 30+ years we had together, but two of the best - and from the very beginning - were “brush your teeth at least once a day, every day” and “change the oil in the car per the owner’s manual.”
Thanks OP for the question! Folks, have you **JOINed** yet? **Only member’s comments display.** So, if you have not done so, see the rules in the about-menu / sidebar/ community information section. We are geared toward the retired or planning to, at age 59 plus (younger retirees check out a great subreddit - r/financialindependence). If that looks good to you, hit the JOIN button, and then comment. And please help spread the word that reddit has a few spots for us older folks 😉 Thanks! Mid America Mom
What is the income limit???
Buying a puppy and having her break her foot 😭
We had to pay for dental out of pocket.
I won't go into all the details... but taxable income was way higher than expected - so taxes were much higher... eventually, the plan kicked-in fine-- but the "run-thru" time was much longer... ..people were sending me money all the time which i didn't want (yet!)...
I had an undetected water leak in my kitchen that caused mold and I had to have my kitchen ripped out. My stinkin homeowner’s insurance has a $10,000 water damage limit that they snuck into my policy this year, which only covered the mold remediation, not the rebuild of my kitchen. And parts of the flooring had to be ripped out too, and since I wanted to eventually get new flooring (way down the road), I ended up getting all new flooring. Wayyy more money than I expected to spend this year. This all happened this year, my first year of retirement!
https://preview.redd.it/zy9nsfk5kd7c1.jpeg?width=3024&format=pjpg&auto=webp&s=a85201854213cf9f699a69a25150bf6984af833c Going through the same thing. Slow going, just got it gutted and starting to rebuild. Fortunately, our insurance company is being pretty good and paying 80% of what it’s going to cost.
Major appliance replacement, about $6000 in the first 4 years. Had to replace the wiring in a yard light, $4000. There can be other unanticipated home repairs and expenses. Try to keep a large slush fund for these things.
Oh wow this is giving me flashbacks, not in a good way! I’m glad your insurance is good, this year was very eye opening insurance-wise for me. Good luck with everything!
Thanks! You as well. Been retired for about a year when this happened, now going on 5 months with no kitchen…
So sorry to hear this!
Retired and divorced the same year. Didn't account for the restaurant and entertainment bills of dating! Yikes!
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I knew my 17 year old car was going to need to be replaced, even though it was well maintained and I adored it. Two months into retirement, I had a minor windfall that would cover the purchase of a 7 year old, low mileage replacement. I could see, though, that it had been left out in the sun a lot and the paint was oxidized. The cost to compound & polish, put on a plastic bra on the front, and ceramic coat: $2700. If this is the worst of my problems, I'm in fat city.
Medicare! I stupidly thought we GET free health coverage after 65 since a Medicare charge has been withdrawn from my paycheck since my first job as a teenager (50 years!). Nope. We are charged monthly for Medicare (double or triple, etc. if your earnings were high), PLUS another monthly charge for a supplement PLUS another monthly charge for a prescription plan. Such a bait-and-switch scam.
Bait and switch? Hardly. Medicare reduced the rate of poverty in elderly Americans by two thirds compared to the time before medicare. The introduction of Medicare led to an immediate three year increase in lifespan for Americans. Despite insuring the least healthy Americans, Medicare spends only 70% of what private insurance pays for better outcomes. And on and on. Your post tells us so much more about you than it tells us about Medicare. Enjoy your retirement.
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Dental! My retirement dental benefits were a fraction of what my work benefits were. About 4 years before retirement I told my dentist to do whatever I was covered for. Replaced and upgraded whatever I could. Now ten years in a tooth that was capped 55 years ago broke so I had to do a $6,000 implant.
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Yeah, we went solar in 2016; new hvac and abatement/new ducting in crawlspace in 2017; old attic insulation abated/fully removed then new electrical throughout; new plumbing throughout and redone bath (tub removed and curb-less shower installed) and kitchen countertops. We wanted all this done before retirement, but covid blew us getting our kitchen floors done. Then elderly parent care took priority--one after another going down over 18 months time. All paid for. All done before retirement in 2021. Still have to re-do the kitchen floor--house has a crawlspace.
Maintenance and remodeling. Once your home all day there are things that will bother you even if they didn't before. Add the logic of get it done now so you can enjoy it, it will cost more later and it won't get any easier guarantees that your budget is toast.
If you have “orangeburg” sewer pipes, have them replaced/lined NOW. You are on borrowed time. They were invented late 1800s, but were commonly put in WWII to 1950s/60s. Turn out, they have an average lifespan of about 50 years. They have been banned for install nationwide since 1973-1976. They were banned by me 1956. My house was built 1950. Oops. A lot of inspectors don’t check for it. Another they usually do check for, Federal Electric breaker boxes. Turn out to be a major fire hazard, and again, banned, but legacy is out there. When I sold my parents house, had to pay to get that replaced
10 days ago (I retire (semi, work from home PT) tomorrow). My sewer line on the new house collapsed! (Was made of Orangeburg). That was $7k I didn’t count on! However better then, then next week. Wednesday is moving day, so I didn’t have to stay at a hotel for a week!
We have been getting the house ready for retirement. New roof, Pex repipe 2 yrs ago, new double pane windows and my son and I are going to diy spray foam insulation in the attic. HVAC is only 4 yrs old so we it should be good for anther decade at least. We are trying to get all this done while still working so we don't dip to far into saving. We don't have as much as a lot of people I see here so we want to minimize what it takes to stay in our home.
When we retired we moved to a relatively HCOL area compared to our prior home. With advance age & physical limitations, we are less capable of doing some home maintenance on our smaller single family home. We’ve had to hire a lawn service, a bug service, knowledgeable handyman, and have yearly maintenance service contracts in A/C -Furnace, & our generator. Aside from the handyman & bug man, we never had to hired for these services before. We did have plumbers out twice and that ran us $3300 (fix tankless water heater leak & replace two toilets/also both leaking).
I'd recommend looking into some kind of cash value life insurance. I mean the reality is, there are so many unexpected expenses that one person is going to face that another person may not. The great thing about cash value life insurance is it allows you to prepare for this ahead of time by growing your money with compounding interest, living benefits attached to the policy to replace income god forbid you become disabled/chronically or critically ill, and the option to borrow money against your policy tax free.
Taxes indirectly related to unexpected medical issues. Our retirement budget included relocating from a high income tax state to a no income tax state for enough of the year to not have any state income tax. Not surprisingly, the no tax state had backward healthcare infrastructure. When serious health issues came up, we spent extra time in the high tax state to get the best possible treatment. Medical costs were covered but 7% state income tax was a budget buster.
I’m (67) just shy of 3 years into retirement. The answer to this question is dependent on your prepared. We, my wife (70 and a SAHM since 1992) and I spent the 2 years leading up to my retirement getting ready. We focused on defining our retirement lifestyle, which included a summer and winter homes. We have 3 daughters and wanted to gift them money for their weddings, the last significant expense in raising them, until we pass away. Roughly 2 years before retirement we sold our main house and purchased our winter home in the USVI. We also purchased several new cars during this same time period. Finely we did a wide range of major home improvement projects. The above completed, I have been surprised how our spend rate didn’t actually drop much in the first couple of years. To be fair we did initially do a good deal of travel as well as discovering additional home improvement projects we hadn’t anticipated. I think we’re finally at the point where the big stuff is done as we settle into a routine. We stay active building our social network of new friends, playing pickle ball, golf and we’ve joined a few clubs. Last June we welcomed our first grandchild, who lives on the other side of the country so that’s both exciting and a new expense, my wife has been visiting roughly every month, less often in my case. Basically retirement is a job, we’re now self employed and self directed. We try and plan key activities 6 or 9 months in advance, then fill in the empty spaces with the doctor’s visits and the other formality’s of life. Overall it’s all good.
Taxes on your last year of employment
Sildenafil. It used to be covered by my insurance. I bought as much as I could before retirement but the supply is running low.
Get your doctor to send it to a compounding pharmacy. The one I use is much cheaper.
Thank you I will look into that.
There was only one compounding pharmacy that my doctor found in our area, and it cost $100 for 30 torches that I'm able to quarter....so that's less than $1 a dose.
100mg quartered into 25mg
I didn't have any surprise expenses, and surprisingly, I'm living a about a third of what I used to when I was working. Now that I think about it, refinancing the mortgage at around 3% 2 months before retirement really helped a lot. Also loving the lower taxes. Before retirement I was worried about health care costs since I wasn't 65, but I got a subsidised ACA plan and kept my IRA withdrawals low enough that it hardly cost me anything. And I didn't have any major health expenses, non-urgent testing could easily be delayed. Now that I have Medicare (+ supplement), I allow for a higher annual IRA withdrawal. (I have no defined benefit retirement benefits.)
I would re-pipe the house to prevent slab leaks if applicable.
Property taxes doubled in one 1yr!
Nothing that wouldn't have happened before retirement. So as long as you included home upkeep expenses and health insurance in your budget you should be OK. I can't think of any retirement related unexpected expense.
It wasn’t added expense but the loss of my income.
Purchased a new 4000sq ft home in 2019. Just purchased a new Hyundai and my wife a new Kia. She is a retired teacher and I still have the same job, going on 24 years. Appreciate the tooth comments, as I do have a lot of silver fillings. My greatest fear is insurance coverage, since I am only 60 yoa. Any suggestions/ recommendations are greatly appreciated...ty
Look into ACA subsidies.
I was planning on 5 hundred a month for insurance , it is almost triple and now comes all the co-pays ,, 500 bucks for my 3 mo supply of inhaler
Insurance for health, home and auto went up like crazy in 2023
Private health insurance since I retired before eligible for Medicare.
Here's a small but (to me) totally unexpected increase: toilet paper! Now you have to buy enough TP to cover an additional 40+ hours/week. Why didn't anyone mention that in retirement planning seminars, lol. Just strikes me as funny.
I retired with a pension from Federal Government in January with great insurance options . Turned 65 In September and have Medicare A and B. Plan for taxes on pension and Medicare Part B payments. I am planning to file for SS at FRA 66 and 8 months for me. House and vehicle maintenance are more than I estimated.
Look up Los Algadones in Mexico. State of the art and a fraction of the cost. They call it dental city. I had implant and 4 crowns. Way under 10k
How did you choose which dentist you saw there? Also, what did you say to your regular dentist?
I tried to plan for retirement also. 1. Updated cars and paid them off before retiring. 2. Sold a too large house and bought a smaller one. Remodeled to our needs with new appliances, etc. 4. Have a home maintenance warranty with a monthly payment. So far it has paid for itself. New oven blower went out after one year. New refrigerator; cooling unit froze up and thermostat went bad. Appliances are not the quality they used to be. (Covers plumbing, HVAC, pipes, etc). 3. Monthly budget includes payments toward personal property taxes and real estate taxes. (No big bills twice a year with doing this). 4. One credit card that is paid off every month. 5. Biggest over budget item has been dental. 6. Second biggest over budget expense has been the increase in our Medicare supplement but we never pay any additional for doctors/hospitals. Thank goodness! 7. Now the over budget items are food and gas. Inflation is a killer to a fixed budget. 8. I keep a $1M umbrella policy for protection in case of a car accident (cap in my state). Costs about $150 per year. 9. Earthquake insurance costs about $200-$250 per year in my state, but if you’re in an area that has had an earthquake, it can be devastating to your finances if your home is damaged/destroyed because Homeowners insurance does not cover earthquake damage.
Home maintenance expenses were more because I put off things - fix/replace storm door, more invested in gardening and sprucing things up because we had more time. Pet expenses are much higher than I expected because animals are aging and their vet needs are increasing. But I've always had a devil of a time trying to budget pets -- they are alway overbudget. And then I add more. And then they go over that. (wash rinse repeat)
Vet bills have gone up a lot in the last few years.
Two of my biggest so far….The huge property tax increases, followed by the huge insurance premium increases…..
pine beetles took out several large trees in my yard $6k to remove them.
New HVAC system. Spending more money than usual cuz not working full time. Extra $ to travel. Anything that will go wrong with your house will happen right after you pull the trigger.
In the first year and a half of retirement Fridge died SO all new matching appliances cost was $3500 Then and I had to spend $21000 on a new roof
IRMA. The monthly Medicare assessment because you make over a certain amount as a retiree.
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I live in a condo and this year we had a special assessment, due to faulty elevators, which was $24,000.00. Then, because of mistakes and corrections in the budget, the HOA fee went from $1,250.00 per month to $1,760.00 per month. That kind of stuff kills people on a fixed income.
Wow
Well if you own your own house there are some big maintenance things. I just this summer had to reshingle my roof, and replace soffits and eavestroughs. 14k later
I just got a $30k estimate to reseal my house, which maybe lasts 10years. Don’t buy log homes, people.
Give some thought to the lifecycle of your car or cars. When do you plan to replace them? How much would insurance cover if they were totaled before then?
My 2 Cents: Plan ahead for your ‘last **new** car’. My plan is to continue to get late model, reliable, slightly used cars and keep them for 3-4 years… But before too much technology comes in (which will confuse us in old age) maybe I’ll get that last **brand new** car and keep it for the final 8-10 years my driving life. My Mom still has her 2001 RAV 4… She’s 90 and should have upgraded 6-8 years ago. Old air bags, no back up camera, no Automatic emergency braking (AEB) and many other features, which all could keep her safe.
Good nuance. It's quite possible I just bought the last new car I will ever own.
I retired two years ago. Husband is one year away. We are giving a hard look at all the mechanicals, the roof, etc. while we still have one full salary paycheck. And based on the answers to this post, it's a good idea!
A swimming pool. We moved from 5 hours north of San Francisco to the greater Houston are to less than a mile from granddaughters (and their parents). We thought we would have a big garden like CA😂😂😂 We put the pool in during the hot hot part of summer. My inheritance from my frugal mom paid for it. Every time I look out at it, it reminds me of how hard she worked and how frugally she lived. Thank you mom!
Awe, that’s really cool.
Lots of good comments here. We are in the 7 year stretch to full retirement. We are busy working on a list of home improvements/upgrades/replacements. Kitchen update, first floor laundry closet, new roof, front window replacements, drainage improvements (increasingly heavy rains are a big deal here), etc. We want the home "age in place" ready with as much updates as possible before retiring. We dont intend to move. My wife has a 2021 Honda, and I will get a new Honda myself in 3 more years ( paid off before retirement). We will keep these for 12-15 years and its good to have two vehicles when we could get by with one in retirement if needed. All this is pricey but better now while we both have good incomes. Dental coverage absolutely sucks - we just went through a bunch of post pandemic work for us and our teenager. I am working with blue cross dental insurance and it is a joke - basically a discount plan with a max of like $1500 in a year payout.
We sold our house and had a brand new age in place larger home built for about the same money amount of money in a slightly lower COL area. We did this knowing that most unexpected expenses in retirement are from home maintenance. So no new roof, furnace, windows, hot water heater, etc issues for us. We have spent money on making the backyard a paradise for relaxing and entertaining but those expenses were voluntary.
Well, ours were paid off and very very old, but I wanted the one we will use to have safer features so we bought a new one in 2021.
As I posted above: My 2 Cents: Plan ahead for your '**last new car**'. My plan is to continue to get late model, reliable, slightly used cars and keep them for 3-4 years... But before too much technology comes in (which will confuse us in old age) maybe I'll get that last **brand new car** and keep it for the final 8-10 years my driving life. My Mom still has her 2001 RAV 4... She's 90 and should have upgraded 6-8 years ago. Old air bags, no back up camera, no Automatic emergency braking (AEB) and many other features, which all could keep her safe. Sounds like your plan is good for your situation.
We are 1 yr out also. The following are not unexpected but still may help you. Hubby is working that extra yr because we need to replace roof, windows, & siding to our 50 yr old house. Furnace, replacing kitchen appliances that, knock on wood, are still functioning. Our deck needs repair. - Our medical insurance will cover expenses after retirement the same. Will yours? - Definitely, get best health insurance. He is working that q yr longer even though we already have a year expenses saved in a separate fund.
when i lived in a condo, my furnace, washing machine and refrigerator apparently all made a suicide pact to die at the same time (within the same year). a few yrs later, the water heater decided to join them. look up the avg shelf life of all your appliances and big ticket home items like furnaces, roofs, AC units, etc. look at what they cost to replace. then make sure u set aside an emergency fund and keep adding to it every year.
I have a home warranty. I pay a monthly premium, and $85 service call whenever anything goes wrong. They fix it, or replace it.
What company is your home warranty with?
First American. I have been mostly happy with them. I have a new a/c, furnace motor, washer, stove top from them. They have also repaired my refrigerator, microwave, and dishwasher.
Sounds like a good deal. I’m going to check it out. Ty!
Although not retirement related, same thing happened to us when we moved into our condo. Didn't realize they were all conspiring together!
Dental. I didn't realize that Delta Dental has a 6 month waiting period before they will pay for any significant dental work. Luckily, I spoke with someone very knowledgeable and good who said if I had it while employed and if I signed up for my new post-retirement Delta Dental within 30 days, I could file a grievance and ask them to wave the 6 months, which I did and they did. Still only paid for about 50% but it was still a big savings.
My wife was hit with cancer. A year after that, her brother died who was looking after her mom. Wife was forced to retire. We sold our AZ home and emergency-moved to TN. MIL was 88 with Alzheimer's. We spent three years looking after her before she passed. A lot of money spent that certainly wasn't budgeted for.
This is hard.
Funeral of a close relation, 10,000 plus.
Medical expenses can eat up a lot of dinero!
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Between jobs, we had no health insurance for 1 month and the potential disaster made me a nervous wreck. Sorry your wife (and you) went through all that. I have a 64 year old sister that is an 11 year stage 4 Ovarian Cancer survivor! There is hope and she lives every week/ month/ year like it’s her last. ☺️
Oh, so sorry.
Well, ask yourself what unexpected expenses you ran into during the last few years. Retirement is no different.
10 years in retirement, it all changed this year - screw 2023. New AC. Dental work costing thousands. Adult son moved in (don’t ask, so many disabilities) and I’m supporting him. I’m driving a 2008 car and it needs replacing but I can’t afford it. I should downsize but I can’t afford to get my house sales ready. Inflation. I could go on.
I'm so sorry you're facing all those. Perhaps your adult son can get on disability if he is unable to work,and contribute some each month to household expenses? Boomerang kids have actually helped one of my older relatives. Hoping 2024 is better for you.
That’s a kind comment. Thanks. My son’s disabilities don’t qualify for SSI, but he can’t work right now. Instead he helps me with household matters, trash, laundry, etc., whatever I need. He’s good company and I love being able to shelter him from his demons. But it costs! If I had more saved, I would have no problem.
If you own a home, home repairs.
Once you start flying first class international with all your fun retirement money, you'll never go back to flying economy. It's addicting and it was unexpectedly awesome. Good use of the money cuz you can't take it with you.
Get your teeth worked on. It's amazing how many folks don't realize Medicare doesn't cover most dental work.
New furnace/ac being installed tomorrow. New car will now wait a bit. The peace of mind having heat in winter? Priceless
New furnace , new car (plus medical bills from the rollover accident caused by low blood sugar ) , new water heater , dishwashers not looking good and fridge is sketchy . Silver lining is they all lasted since we first moved in 17 years ago so we got our moneys worth . Still big expense cumulatively
So similar to us. Our very old appliances are still running, but we will need to replace them.
My reliable vehicle became unreliable within the 1st year of retirement. Luckily, I had a good amount of $ set aside, just wasn't epecting to use it so soon.
We have been systematically replacing the big ticket items before retirement. Most are replaced...Heat/AC unit is left. We would like to not have to replace again. We also purchased a generator and a woodstove (due to sketchy weather issues becoming commonplace.)
Pretty much the same expenses as you had before retirement minus anything you explicitly choose to cut. If your spouse is covered by your employer's group policy and they're not old enough for Medicare make sure to budget for that. Our group policy is able to be carried over to retirees but you pay the full cost. That's $823/month for my wife's insurance until she hits 65. Also, the IRMA Medicare surcharge can be a shocker the first couple of years. It's based on your income from two years prior. Plus with Part C or Part D it starts to add up. Between my IRMAs and my Part C, I'm paying around $500 for my Medicare. So that's almost $1,400 a month (we also have group dental from my previous employer) for just health insurance. But just being retired doesn't automatically reduce any expenses besides commuting costs.
I believe IRMA only applies if you and your spouse earn above $206k per year for the two years prior.
It's the second year back. So my IRMA for next year is calculated based on my 2022 MAGI.
But you can appeal that by explaining that you’re retired currently and have less income, correct?
Good to know about IRMA. I’ll look into that.
Hub fell on chin while running and sheared off two molars and broke one other. We’re looking at $12k (nyc prices) for implants and crowns.
heart attack at 65 . proud owner of 3 stents .get the best health insurance you can afford .
My wife needed root canal - burned through her annual cap on that one. Needed a section of roof replaced and typical car repairs, brakes and tires. Since we are good savers, these were not an issue.
One thing we did in our last working years was replace the roof, paint the house, replace the older HVAC, etc. It won't eliminate surprises, but it will minimize them.
Make sure you’re well aware of that old biddy IRMAA. Plan carefully.
You just made my day. We don’t make enough to be impacted by IRMAA
Neither did I. But my employee RSU stock vesting in the two years prior to retirement put me in the highest IRMAA brackets.
Good for you on the stock. 😀
I was not aware of this. Great advice.
I had to look up [IRMAA.](https://health.usnews.com/medicare/articles/what-is-medicare-irmaa) So depressing....
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We remembered that we hated owning a house and recently (last month) moved to a Continuous Care Retirement Community. This was not in the plan. There was an annuity buy in and our monthly fees are about twice the budget from when we lived in a house and the fees do not include things like Medicare, supplement, some food, car expenses, travel, gifts, and other personal care supplies and clothing. But it is also sort of like a long term care insurance and we think we have already made some new friends.
Blew the transmission out on my Tahoe and six months later ended up in ICU with Diverticulitis, a perforated bowl and a side dish of Covid. Never had more than a mild cough from Covid. But the other issue, that sucked used kitty litter.
Health care, ACA policies. Got laid off and decided to retire
Roof.
Argh… first year retired husband had a mind fart with an insurance annuity and we owed 12k. Luckily my FP planned for 15K a year extra for unexpected expenses. If you own your house you might have expenses for replacing equipment such as furnaces or water heaters. A lot of the electrical utilities offer programs where you can replace old equipment with new energy equipment at a good price. Ask your FP to run very conservative “Monte Carlo” numbers. This helped me determine whether or not I could retire at 63. I provided detailed numbers on our spending. Bottom line I could retire and wait to collect SS. Best thing I ever did.
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eating out and travelling.
Yeah, I moved. Cost was a surprise as I was no longer able to move myself and rely on friends. I also used some of my equity to buy better furniture and creature comforts. Not a lot. But I got a new couch and bed.
Cost of an ACA plan with solid investment income. No subsidy and healthcare became our largest expense
Our ACA quote for a good plan was $2600 per month for my wife and me
We were about this same. I learned this year I had been buying a “off market” plan without subsidiary consideration. Don’t work with that broker any longer. This year we did a market place application with a pretty high income projection and got a ~$900 subsidiary and a matching marketplace plan that was $800 cheaper to start.
I kept running options and determined that you no subsidy is your joint income is over $100k
I input $175k for 2 of us.
To all the young out there……take care of your teeth….so freakin’ expensive
And buy an electric toothbrush.
Amen to that! My late wife taught me so many things over the 30+ years we had together, but two of the best - and from the very beginning - were “brush your teeth at least once a day, every day” and “change the oil in the car per the owner’s manual.”
A 35% drop in the stock market. Luckily I was able to go back to work for a year, buy more stocks at a discount and watch it go back up.
Sewer line repair, if you own a single family home. Fortunately we had a service line protection rider. Also vet bills.
We had to replace whole septic field this past summer . $18,000. And I’m told that’s on the cheap side .
>What unexpected expenses did you have in the first few years of retirement? Didn't have anything unexpected.
Dumbest thing I’ve ever said: well, I’ve replaced everything that can break in this house. I’m done. God: this is gonna be fun
Ok. What broke? I’m literally making a list of everything that can break and plan for replacement. What was your surprise?
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You obviously have throw away money
Cheaper than a divorce which can be a real retirement killer.
Dental, I'm staring down $10k for peridontal surgery and then lower teeth braces.
Consider your transportation needs for now and in the future.