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When you retired what expenses surprised you?
bpost
Member Posts: 32,669 ✭✭✭✭
I am thinking about retiring, I will be a Meigs County poor boy when I do decide to pull the plug.
I am going to stock up on food, meds, fuel, paint, TP, oil, spare parts, oil filters, water filters and the like before pulling the plug. I also plan on having a savings account set aside for things like dishwashers, and other appliances with enough cash in there to cover the cost of replacing them.
When you retired what expenses did you find a year or so down the road that hit your pocketbook and took you by surprise?
Comments
Retired in 2014 at 59 when Obamacare started. It would have been $577 a month just for minimal coverage. I got a job driving a school bus and went on State insurance.
Liquor store
Don't worry about the nickel & dime stuff unless you are now in hospice care. You need to plan on living until you are 100, & unable to get to the bathroom on your own, much less change the oil in the car that you will have totaled when you ran into a tree.
It doesn't matter how many insurance policies you have, you will be slammed by medical & dental expenses you never thought you would have.
And, unless you have long term care insurance, some day you will need to pay someone to feed you & change your depends.
Getting old is getting a lot more difficult than you thought it would be.
Neal
Have a good vehicle for you and your spouse that are paid off before you retire. If your house isn't paid off look at a re-finance with the low rates of today.
Start getting rid of crap you don't need or use anymore, sell her or on another auction place.
I tried, never got a bid for her.......maybe I shouldn't have posted her photo
Oh man that is what happens when you drop an "e".
I dropped some "e" one time, and it was the best time of my life!
🤩
Merc
I "retired" at age 55...almost 8 years ago. More medical expenses than I figured on so far. But it was planned for overall. Our costs for health insurance went up faster during the early years but have leveled out the last few....
On the + side, moving from IL to MO cut my overall tax burden by about 60%. Not having to wear a coat and tie to to work everyday has cut down on the clothing/shoes I had to buy. No almost daily lunch meeting that usually cost me about 75 bucks a week. I no longer drive 250-300 miles a week driving to and from work and some other work related travel...
Mostly I am thankful we planned well, got lucky in a few investments and have been blessed to end up in a good place...
Been retired 22 years. Pull the plug and enjoy life as soon as you can. Retirement is not as expensive as you think unless you are making large payments. Auto expenses are my biggest outlay. The older you get the less you spend on travel, toys, etc. As stated health related costs are large.
one other thing to consider Bruce, as william said you will save some money by not being in the daily grind, to from work, eating lunch, ect. But I think one other consideration is your health, if you are physically healthy get out as soon as you can afford it, you will be able to do the things you want to do, if you keep waiting till you think you can afford it, your health may limit the things you can do after retirement. I had all kind of things I wanted to do, but my health failed a few years ago to the point I am limited to the things I can do, even though my brain says I can still do them, my body tells me next day I shouldn't have done them. worse case if things get tight you could still work a day or so a week to supplement your income.
Right on Hillnille
ammunition
I waited until I was 67 to fully retire- Medicare plus a Medicare Advantage plan takes care of the major medical expenses. We had paid off all debt, so no house payments/ car payments. If I need another vehicle, I'll go buy a used car for around $4k cash. My expenses did drop a lot- no commuting, no clothes for work, lunch is raiding the fridge, etc.
Thing that HAS absorbed money has been taking care of deferred work on house- replacing deck, replacing plumbing vent collars, attic vent fan, etc.
When you debate about do you want to retire (or maybe cut back on work hours) consider this- Retirement & Survivors Benefits: Life Expectancy Calculator (ssa.gov) Use that to calculate the average lifetime you have left. Besides budgeting money, you need to budget time- because you cannot buy more of that. I really enjoy opening day of dove season.
The stats say that I have 14 more of those. Some of which I would not be able to use due to age. Now, do I want to spend those 14 opening days working- or loading up my pockets with # 7 1/2s, and taking a grandkid out dove shooting?
INSURANCE, MEDS< DENTA,L HEARING AIDS, ALL ARE MORE THAN PLANNED FOR.
TAXES
I am 54, well soon, hoping to retire in about 5 more years. Everything is paid off, got some 401k money saved up, but who knows what will happen to that. Thinking about moving back to home land and get all the free stuff, summers in Finland, winters in Alabama :)
Health insurance premiums and supplemental policy more than when I was working but I make more on retirement so it evens out.
I retired 2 years ago, at 64 and collected SS for one year until at 65 my central states pension kicked in. i used the lump-
sum from that last job to pay off the house. than house taxes may & october, wiped me out, than november homeowner's
insurance...$1600. The stove went down last fall...$1200. February the furnace croaked, $5000, when it was 20 below.
the silver lining was when my medical, medicare is only 99 a month, and dental 57 a month really helped my budget.
i just have the CC to pay off. i took the 1400 stimie money and bought an E-Bike....himiway helps my bum knee when i
pedal too much, just throttle up the hill, and it gets me out of the house.
Although technically not retired, when my best friend Ron and I closed our gun shop in CA and eventually relocated to Florida it amounted to the same thing. Health insurance has proven to be far more expensive than either of us had planned for. Ron is married, so it is even harder on him. Both of us will be 61 this year and we are anxiously awaiting enrolling in Medicare at age 65. Because there is no state income tax here in Florida, that helps, as does my owning this shack. On the flip side, "cheap money" has meant lower yields on my investments, making it so much more expensive than I had calculated.
One thing to do is withdraw your IRAs BEFORE you start Social Security. The IRAs are counted as income & increase the tax you pay on Social Security. Also by delaying SS you will increase the amount you receive. I though starting at 62 was a good idea as I never expected to live this long.
POKER, last nite cost me $19.00 ;-)
if we knew how long we were going to live it would be easier to figure out retirement plans
My greatest fear is dying and leaving money in the bank.
I guess living paycheck to paycheck has its advantages in this regard. 🙂
Both my inlaws ended up with dementia and Alzheimer's the last few years of their lives. They did have a very sizable nest egg that petered away all too quickly. Once they were pretty much broke, the state kicked in and payed for the high costs of the care facilities.
This happens more often than most people realize.
Yes, this is true but if you grab it before age 59 1/2 you will get hammered. If you take it all at once you will still get hammered.
Then there is NY State taxes. I messed up for at least a decade. IRA distributions go on line 9 of IT201 and if not state or federal pension can go on line 29 as a subtraction to your NY gross income subject to a $20,000 max. Now I have to file a amended return to get back the last three years. Before that TOUGH, it belongs to NY State.
Be careful about pulling too much from your IRA CD,s or distributions because you could put your NY State Star status (Real Taxes) in jeopardy.
New York has a new law now. They don't need a warrant to come after you or your employer for money that you owe.
About 10 years ago my son was flying into NYC on business for a major bank in Charlotte. The State of NY seized $9,000 right out of his 401. I believe he ignored their letter----------------------------Ray
Biggest surprise for me was IRA CD's going from 5% to less than 1% in last few years.
Another point that has not been brought up and could be an important factor regarding retirement.
A persons expectations come to mind heavily. Most people I know (including myself) are not rich and do not meet all of those tales we are always reading about how much is needed in your savings account to consider retirement. Most of those stories include figures that contain a lot of zeros!
I say as long as you are not planning on an extravagant lifestyle. Maintain a living within your means of income and have no debts, you would be in the same boat as a pretty high percentage of current retiree's.
I retired at 57 and the big hit on my annuity was the health insurance. I went from paying about 25% of the cost to 100% overnight. The other money pinch came from having the time to do all the projects that had been postponed. Once I had all the time I wanted, the cost of doing all those things ate up a lot of money in the first year. Another year of pinching and scrimping followed and then I got a couple of part time jobs. One of those part time jobs morphed into a new career and I'm doing fairly well money wise.
Like mark C said health insurance is pricey. While I am not "retired" I haven't worked a paycheck job in 2 years. I may go back to work soon. The insurance is 600+ a month and going up. With 7 more years until I can use medicare I may need to get a job to offset that. Everything I have is paid for but I still have a son at home (14) and that carries some expense as well. COVID put a huge dent in what I was doing so a return to a job is probably in my future.
Depending on how much you earn Health Insurance shouldn't be a large cost, with the tax credits what would cost me 800 a month or more only costs me a couple hundred a month to insure the wife.
Since I'm now on disability I get the same thing I would have gotten if I waited until I was 66 and 8 mos, plus I'll go on Medicare a year earlier.
My income is low enough that the VA won't be charging me any co pays going forward.
Biggest expense, not a surprise is insurances and taxes.
Cost to insure both houses, three cars, health, firearms rider, business insurance etc. Along with taxes on both places and cars eats up a good chunk. Keep your IRa withdrawals low enough to prevent tax hits.
Yep, I want my last check to be to the undertaker, and I want it to bounce....
What would be nice is if they made sure when you withdrawal money you would never pay a higher bracket than when you deferred it too