Are You Forgetting These 10 Retirement Expenses?

Most people think they have retirement costs figured out. You plan for housing, food, and maybe travel. But many expenses slip under the radar. These overlooked costs can quietly drain your savings and force you to adjust your lifestyle later. The good news is you can prepare for them now. Let’s look at what often gets missed and how you can plan ahead.

Are you underestimating your day-to-day spending?

Spending in retirement is tricky. Small changes pile up fast. Eating out a few extra times a week, upgrading your internet package, or helping a grandchild with school fees can stretch your budget.

• Nearly one in three retirees spend more than they can afford, almost double the rate in 2020.

• Only 59 percent have at least three months of emergency savings.

• More than a third face surprise expenses that stress their budgets.

Build a flexible budget with breathing room. Track spending patterns and review them regularly. The goal is not to cut every treat but to keep habits from snowballing into a financial drain.

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Are you prepared for the real bill of healthcare costs?

Healthcare is one of the most underestimated costs in retirement. Medicare helps, but it does not cover everything. Premiums, prescriptions, dental, vision, and long-term care all add up.

• A 65-year-old retiring in 2024 may need about $165,000 for healthcare alone, excluding long-term care.

• A healthy couple could see annual costs grow from $14,500 at age 65 to nearly $50,000 by age 85.

• A private nursing home room averages $116,800 a year.

Plan with realistic numbers. Factor in medical inflation, which rises faster than general inflation. Consider supplemental insurance and review coverage often. If you wait until health issues appear, your options shrink.

Do housing costs really go away?

Many retirees think housing costs drop once the mortgage is paid. In reality, they rarely do.

• Property taxes, utilities, repairs, and insurance all keep climbing.

• Nearly 11.2 million older adults spend at least 30 percent of income on housing.

• Downsizing can still mean moving costs, HOA fees, or renovations.

Set aside money for ongoing maintenance. Expect to repair roofs, update heating systems, or modify your home for aging in place. These costs can come at the worst times if you are not prepared.

Are you giving too much support to adult children?

Half of parents help adult children financially, and retirees are no exception. That help averages nearly $1,500 a month.

Many cover essentials like groceries, rent, and medical bills. The sacrifice?

• 50 percent say they would deplete retirement savings to continue support.

• 35 percent would delay retirement.

• 17 percent would return to work.

Generosity is natural, but it must have limits. Define how and when you will provide help. Make sure it fits your retirement plan. Offering time, advice, or shared housing may help without derailing your own future.

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Are hidden tax triggers eating into your income?

Taxes do not retire when you do. In fact, new triggers appear.

Hidden Retirement Tax Triggers

Required Minimum Distributions (RMDs) start at age 73 for most retirees. Miss one and you could face a 25 percent penalty.

• Social Security can be taxed if your income passes certain thresholds. Claiming early shrinks monthly checks by about 30 percent permanently.

• Higher income can also push up Medicare premiums through IRMAA surcharges, adding thousands to annual healthcare costs.

Work with a tax plan before retirement. Strategies like Roth conversions, careful timing of withdrawals, and charitable giving can save money and protect your lifestyle.

Is inflation quietly shrinking your savings?

Even modest inflation eats away at your purchasing power. Over a 25-year retirement, costs for food, energy, and healthcare can more than double.

In recent years, inflation has spiked well above averages. Retirees on fixed incomes feel it most. A diversified portfolio and a plan for rising costs help keep your standard of living intact.

Are you ready for the price tag of long-term care?

Most people underestimate the odds and the cost. About 70 percent of 65-year-olds will need some form of long-term care.

• Assisted living averages nearly $70,000 a year.

• Nursing homes exceed $100,000 annually.

• The average stay is about two years.

Insurance can be expensive, but options exist. Hybrid policies, savings earmarked for care, or even shared family planning can ease the burden. Ignoring it is the costliest choice.

Do you have enough cushion for emergencies?

Cars break down, roofs leak, and scams target retirees every day. Many people stop building emergency funds once they retire, assuming fixed costs cover most needs. That is a mistake.

Keep at least three to six months of living expenses in liquid savings. It gives you flexibility to handle surprises without selling investments at a bad time.

Have you budgeted for the good stuff?

Many overlook travel, hobbies, or gifts for family. Yet these are often what make retirement enjoyable.

Trips, golf memberships, or even regular dinners with friends can add up. Skipping them later because of poor planning can feel like a bigger loss than overspending on basics.

Budget intentionally for leisure. Set aside funds for annual travel or hobby spending. These costs are not luxuries if they define the life you want.

Overlooked Retirement Expenses

Could you become the caregiver?

Retirees often find themselves in the “sandwich generation” role, helping both adult children and aging parents. Caregiving can strain finances as well as time.

Regular support for parents or grandchildren may not feel like retirement spending, but it is. If not planned for, it chips away at savings year after year.

Making a Plan That Works

The goal is not to eliminate every risk but to build a plan that can bend without breaking. A good retirement plan should:

• Account for fixed and flexible costs
  

• Include healthcare and long-term care estimates
  

• Build in inflation assumptions
  

• Set boundaries for family support
  

• Allow for fun and lifestyle spending
  

Review it often and adjust when life changes. Retirement is not static. Neither should your plan be.

Get your free tax‑saving plan for retirement

Bottom Line

The most overlooked retirement expense is often the one you least expect. It may be healthcare, helping a child, or simply wanting to enjoy more travel. Whatever it is, surprises cost money.

By preparing now, you protect not just your savings but your freedom. Retirement should be about choice, not constraint. Planning for overlooked expenses means you can live the life you imagine without the stress of running short.

FAQs About Overlooked Retirement Expenses

1. What are the most common overlooked retirement expenses?
Healthcare, housing maintenance, taxes, supporting adult children, and inflation are the top costs people often miss in retirement.

2. How much should I budget for healthcare in retirement?
A 65-year-old may need about $165,000 for healthcare alone, not including long-term care. Couples may need closer to $315,000.

3. Do housing costs really drop once the mortgage is paid off?
Not entirely. You still face property taxes, insurance, utilities, and repairs, which can add up quickly even without a mortgage.

4. How can inflation affect my retirement savings?
Even at 3 percent a year, inflation can double your cost of living over 25 years, cutting into your purchasing power if you don’t plan for it.

5. Should I help my adult children financially after I retire?
You can, but it should fit into your plan. Without limits, it can reduce your savings and even force you to delay or rethink retirement.

Reference

Finance Insights. (2025). Overlooked Retirement Expenses. Retrieved from https://financeinsights.net/lEmtbL4ruJn2PMhPvD4ZH3KLx8?email=tiffany.villegas%40oneadvisorypartners.com

AARP. (2025). The Most Common Underestimated Retirement Expenses. Retrieved from https://www.aarp.org/money/personal-finance/most-common-underestimated-expenses/

Employee Benefit Research Institute. (2024). Spending in Retirement Study: Concerning Trends on Spending Expectations, Inflation, and Rising Credit Card Debt. Retrieved from https://www.ebri.org/content/2024-spending-in-retirement-study-uncovers-concerning-trends-on-dampened-spending-expectations-due-to-lack-of-sufficient-savings--inflationary-pressures-and-rising-credit-card-debt