At 64 you may feel ready to swap office fluorescent lights for morning walks.<\/p>\n
However, it’s good to first learn about retirement\u2019s hidden costs, like surprise home repairs or medical bills Medicare won\u2019t cover, as you plan your golden years.<\/p>\n
Before you believe you have it all mapped out, consider these often\u2011overlooked expenses that can quietly erode your nest egg.<\/p>\n
Many retirees assume their savings withdrawals won\u2019t carry the same bite as a paycheck \u2014 and that can be a costly mistake. Pension and 401(k) distributions are taxed as ordinary income, and when combined with Social Security benefits, they can push you into a higher tax bracket than you\u2019d planned for.<\/p>\n<\/p>\n
How your retirement income will be taxed also depends on which state you live in. Certain states like Florida<\/a> are considered more tax-friendly for retirees. Remember to account for state taxes on pensions or retirement account withdrawals if you\u2019re planning a move.<\/p>\n Working with a tax professional to model your retirement income streams is critical. Consider Roth IRA conversions now if you think your tax rate is going to be higher in the future.<\/p>\n The good news is President Donald Trump\u2019s so-called \u201cbig, beautiful bill\u201d includes additional, but temporary, tax deductions for seniors<\/a> earning below a certain amount each year.<\/p>\n If you\u2019re budgeting to age 85, but your family genes \u2014 and your doctor \u2014 say 95, you could outlive your savings by a decade.<\/p>\n A modest 3% annual inflation rate will nearly double your living costs over 25 years. Suddenly, that extra cruise around your 90th birthday or unexpected inflation spikes can knock a big hole in your balance.<\/p>\n Consider using the 4% rule<\/a> to calculate a safe withdrawal rate for your portfolio since it is meant to make your savings last for 30 years.<\/p>\n Speak with a financial advisor to make sure your portfolio is diversified and has the right asset allocation for your risk tolerance and investing horizon.<\/p>\n Delaying receiving Social Security benefits until age 70 can increase your benefit by 8% per year. Research shows<\/a> that this is the right decision if you expect to live several years past life expectancy.<\/p>\n Story Continues <\/p>\n Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan \u2018works every single time\u2019 to kill debt, get rich in America<\/a> \u2014 and that \u2018anyone\u2019 can do it<\/p>\n Just because your children are grown doesn\u2019t mean they\u2019re immune to financial crises \u2014 and many retirees find themselves footing the bill for weddings, down payments or even bailouts. In a Pew survey<\/a>, nearly 60% of parents of young adults between the ages 18 to 34 said they gave financial help to a child in the past year.<\/p>\n A Savings.com study <\/a> says parents spend an average of $1,474 a month on their adult children or $17,688 annually. Over a 20\u2011year retirement, that\u2019s potentially $353,760 diverted from your own living expenses.<\/p>\n Have candid conversations with your kids well before you retire. Set clear boundaries \u2014 perhaps automating a one\u2011time gift rather than an open\u2011ended support fund. If you have the means, consider a formal loan agreement or gift that caps your liability.<\/p>\n Routine cleanings, crowns, root canals and dentures often fall outside Medicare coverage \u2014 and out\u2011of\u2011pocket dental costs can eat deeply into a retirement budget.<\/p>\n