After saving for decades, it’s finally time to relax. But it’s not that easy for a lot of retirees.
Saving enough is just the first challenge. The next is making sure you have enough to last you through retirement. And with more people living longer, and sometimes starting to save much later in life, there’s a chance your cash flow could run out.
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There are a lot of costs that may suck your funds dry before you have time to realize it. So take precaution and plan ahead. Here are four hidden costs of retirement you should know about now.
1. Medical Bills. Holding out funds in an account you will use solely for impromptu medical costs is a smart way to make sure you won’t find yourself in debt if emergency strikes. Life can change in an instant, especially in retirement. Don’t let medical costs sap away your life savings. Be prepared with back-up funds.
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2. Natural Disaster. With a string of superstorms, wildfires and twisters in recent memory, this may not be a surprise to you. But experts say with climate change natural disasters will become more regular and more destructive. Prepare your house for potential disasters by cutting down dying trees, buying a power generator or building a shelter if you live in a tornado zone.
3. Ponzi Schemes. If it sounds too good to be true, it probably is. Investing prudently during retirement is key. If an investor is promising you double-digit returns, take a step back and see if anything else looks funny. Too many people lose their savings during retirement. Investing is good, but stick to conservative investments.
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4. A Large Mortgage. In retirement, downsizing may be your best option. While staying in your home filled with memories may be your personal choice, it may not be the most fiscally responsible decision. If it’s too big for your needs and you still have large payments to make, think about all the extra energy you spend cleaning the house and the extra money you spend for an electricity bill that would be less in a smaller place. Also consider that if you cut out those monthly charges, you will have more money to spend in other areas, like vacations.
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- Retirement Planning: How Much You Should Really Be Saving
- Financial Tracking & Budgeting
- 5 Simple Ways to Invest Like a Pro
- Retirement Benefits
- Investing Education