Have you fully prepared for your current or future retirement? Most preparation-conscious individuals have no doubt developed a budget with all their customary expenses and are, at least for the moment, determined to stick to it. If your home is paid off, you may have gleefully excluded this expense, among others from your budget plan. Free of the rat race, there are no more costly commuting expenses, and you may even be able to finally kick that expensive Starbucks habit. Everyone loves to have strictly defined sections on their budget, but your emergency savings may end up being the most important of all. Still, there are other expenses that can frequently be either overlooked or underestimated.
Here are three expense categories to look out for.
If you're like most people, your vehicle was probably paid off long ago. It is easy to forget about the other associated expenses that come with one or multiple vehicles. For one, don't assume your auto insurance costs are set in stone. The price of auto insurance drops in your middle-ages, representing lessen risk compared to younger drivers. However, it frequently increases for those around retiring age and any senior citizens. If you own an older car, be prepared for repairs. Make sure you have money set aside for this particularly if it is your only car. It is not an if situation, but simply a when. Depending on the age of your vehicle you may need to purchase another in a few years which is also something to keep in mind.
Home expenses are another often overlooked cost for those fresh to retirement budgeting. A paid off mortgage is unfortunately not the end of all home expenditures. Real estate taxes can pack a big punch if you fail to take them into budgetary consideration. Don't forget about yard care and other routine tasks that go above and beyond a simple vacuuming or sweeping. Repairs and general home maintenance will also come into play, and can be hard to estimate. You may go years with no problems and then have a sudden expense costing several thousand dollars. Suddenly that portion of your budget earmarked for emergency savings is a lifesaver.
There will always be the costs you know and can reasonably plan for, such as all the treatments Medicare does not cover, and then there will be those that can happen unexpectedly. These occur far less often but can cripple your retirement plan if you have no savings available to devote to the issue. This can include you or your spouse's parents needing to move into your home, or your own children may need to return to the nest for a short time. Divorce rates significantly increase for retired couples and can become very expensive for obvious reasons. It is for these reasons and more that retirement planning is as much about the unpredictable as it is predictable.
Financial planning services for your retirement can help ensure you leave no stone unturned when it comes to your finances. Anything can happen in this well-deserved period of your life, and therefore adequate preparation is your best defense. To explore our financial and retirement planning services and see how we can help you avoid being blindsided, contact the BD Financial Concepts team today.
We are a professional financial services firm located in Sanford, Central Florida.