Motivation Monday - Are You Underestimating These Expenses?

While it’s true most retirees spend less than they did while working, there are some expenses people often underestimate when planning for their golden years. Here are just a few:

Transportation. According to Bureau of Labor Statistics, the average household among those age 65 and older spends $579 per month on transportation. This includes car payments, insurance, maintenance, gas and even an occasional airfare.

Medicare Misses. Medicare doesn’t cover dental work, even though the likelihood of needing expensive treatments increases with age. The average cost of a porcelain crown is around $1,400; the cost of implants or dentures can add up to five figures. Yet private dental policies marketed to seniors often limit coverage to $1,500 a year. Hearing aids and eyeglasses are also exempt. And then there are deductibles and co-pays. For 2016, there’s a $1,288 deductible for hospital costs under Medicare Part A and a $166 deductible for doctor expenses under Part B. After 60 days in the hospital, a patient will pay a daily co-insurance of $322.

Taxes. The IRS taxes funds withdrawn from tax advantaged savings plans and taxes Social Security benefits if total income exceeds a specified base amount. Thirteen states tax Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont and West Virginia. Forty-three states tax pensions. Unless a homeowner gets a senior exemption or hike freeze, their home’s property tax will likely increase over time. While some municipalities make tax breaks available to everyone after a certain age, many base them on income limits.

Housing. Even if seniors have paid off their mortgage and get a break on their property tax, repairs and maintenance costs can be higher in retirement. As they age, they may need to hire tasks they previously performed themselves, such as mowing, snow removal, minor repairs and even cleaning. And if they’ve owned their home a long time, it may require big ticket repairs like a new roof, furnace or windows.

A well-rounded retirement plan explores your desired lifestyle, creates a strategy to achieve it and allows for contingencies.

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TSG Financial LLC is a Financial Services company located in Garden City, NY. Securities offered through Securities America, Inc. Member FINRA (www.finra.org)/SIPC (www.sipc.org). Advisory services offered through Securities America Advisors, Inc. TSG Financial and Securities America are separate entities. Securities licensed in: AZ, CA, CO, CT, DE, FL, GA, IL, IN, IA, KS, LA, MD, MA, NJ, NY, NC, OH, OR, PA, SC, TX, UT, VA, DC . The third-party comments displayed are not verified, may not be accurate and are not necessarily representative of our client experience.

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