8 Common Things Older People Fail to Save for Before Retirement
You might think you can retire early, but if you haven’t considered the items on this list, you may want to think again. When planning for retirement, you should remember extra expenses that you may want to forget.
Saving money to supplement Social Security, making investments, and contributing enough to your 401(k) might seem like difficult tasks already. But not accounting for these things can make your retirement even more difficult.
Read more:
1. Saving enough money so you don’t have to work
Not everyone wants to continue to work after retirement. You may decide you want to relax and enjoy your retired years, become disabled, or need extensive health care.
If you expect to supplement Social Security benefits by working, you should have a backup plan.
While continuing to work is a good option, saving enough money so you don’t have to is a wise idea. You’ll have the money if you need it. And if you don’t, you’ll have it to use toward other expenses.
Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.
2. Budgeting for dental expenses
It may come as a surprise, but Medicare does not cover dental expenses. This means you’ll need to pay the full cost for cleanings, fillings, extractions, and any other dental care needed.
Dental care is expensive and doesn’t go away even if you have no problems. It doesn’t even cover dentures, so you’ll want to budget for paying out of your own pocket.
3. Budgeting for health expenses
Health problems commonly arise during the aging process. You may discover new health problems or experience worsening conditions. Medicare Parts A and B do not cover some expenses seniors can face during retirement.
You may need to pay for eye exams, hearing aids, long-term care, and even annual physical exams. If you can’t afford them, your health may decline further, preventing you from fully enjoying retirement.
6 Ways to Supplement Social Security in 2023
4. Budgeting for home expenses
Some people may only budget for their mortgage and utility bills, but you should take other things into account when planning your retirement.
Homes need routine maintenance to prevent more costly repairs, and even the best-kept homes can face expensive problems. Inflation can also impact home costs.
Utility bills will likely increase over time, and so can the cost of lawn care, pest control, and other services.
5. Preparing for the loss of a spouse
Losing a spouse can result in unexpected income loss. To effectively plan for retirement, you should ensure you have enough funds in the event you lose a spouse or they become unable to work.
Unmarried partners may not receive Social Security survivor’s benefits if a loved one passes away. If your partner received retirement benefits, you may lose that income coming into the household.
6. Budgeting in case you need to retire early
You might plan to retire at your full retirement age or perhaps delay it until age 70, but things can happen that may upset your plans. You could find yourself in a position that requires you to retire early.
Retiring early results in lower Social Security payments, may prevent you from contributing more to your 401(k), and forces you to make your savings last longer.
The more years you spend in retirement, the more money you’ll need, and having to leave the workforce early can prevent you from saving.
Do you dream of retiring early?
Retiring early is a goal for many, but few of us have a plan for how to actually do it.
Instead we have questions like... How much money do we need? Where should we keep that money?
A financial advisor can help you sort through your options and come up with a solid plan. Get started today by taking this quiz from SmartAsset to get matched with a vetted financial advisor in your area.
7. Preparing to care for a loved one
Not all people expect to care for a loved one later in life, but it happens. You may need to leave your job early or reduce your hours to care for a spouse or parent.
Even if you choose to hire someone else to care for your loved one or they move to a retirement community, you’ll need to pay for these services.
It’s a good idea to factor in these costs so your loved ones can receive the care they need without compromising your financial security.
8. Preparing for a down stock market
Investing in stocks, bonds, and mutual funds can help prepare you for retirement, but a down market can interfere with your plans.
You can better plan for changing stock market conditions by diversifying your portfolio and assessing it often. Investing early for retirement will also help you meet your financial goals.
You should continue evaluating your investment portfolio regularly, even after you retire.
Bottom line
If you include these things in your retirement plan, you stand a better chance of living out your retirement comfortably.
These commonly forgotten scenarios can quickly eat up your money, leaving you without enough to maintain living costs. Saving and preparing for these instances helps, but it doesn’t guarantee a financially secure retirement.
Creating a retirement budget is also important. There are many ways seniors are wasting money. And making the money you saved last as long as possible is half the battle.
More from FinanceBuzz:
This article 8 Common Things Older People Fail to Save for Before Retirement originally appeared on FinanceBuzz.