2. Some of your expenses might shrink or disappear
Surviving on less money than you’re used to might not be as bad as you think because some of your expenses will go down or disappear in retirement. You won’t have to save for retirement anymore once you’re already there, and you probably won’t have to pay for child care.
You might also save on commuting costs and business clothing. Not to mention, you might be able to score some senior discounts on everyday expenses, like insurance or dining out. All of this can help stretch your dollars.
When thinking about your retirement budget, it might not be possible to anticipate every savings, just like you can’t anticipate every cost. But consider the major shifts to your budget, like no more child care, and don’t forget to account for them when evaluating how much you’ll spend annually.
3. Other expenses might rise
It’s normal to see other expenses, like healthcare, rise as we age. Older adults tend to experience more health issues than younger ones, and though most of them have Medicare, this still has premiums, deductibles, and co-pays. There’s also a lot that Medicare doesn’t cover, like dental care and hearing aids.
Seniors must plan for these out-of-pocket costs, either by setting aside money in a retirement or health savings account (HSA) or purchasing supplemental insurance coverage to pay for what Medicare doesn’t. Supplemental insurance will also bring extra costs, but they’ll be more predictable than paying for everything Medicare doesn’t cover out of your own pocket.