Additional Financial Expenses To Consider for Retirement

Transitioning into your retirement lifestyle is a costly endeavor when you forget to take certain costs into consideration. Don’t let those additional financial expenses sneak up on you in retirement! 

Remember to plan for expenditures like state taxes and home maintenance repairs when you embark on your retirement chapter.

Rising Cost of Living

While you may think your expenses will decrease during retirement, the cost of living can still rise unexpectedly. Inflation can affect everything from groceries to utilities. Create a flexible budget for your daily living expenses to stay on track during retirement.

State Taxes

Depending on where you choose to retire, state taxes can vary. Some states tax retirement income, like pensions and Social Security, while others offer tax breaks for retirees. Avoid making this moving mistake in retirement and find out what to expect with your state taxes.

Healthcare Costs

Healthcare is often one of the largest expenses in retirement. Medicare may cover a portion of your medical costs, but it doesn't pay for everything. Consider allocating your budget to make room for supplemental insurance to help cover gaps in Medicare coverage.

Long-Term Care

Long-term care, such as assisted living or nursing home services, can be costly for many retirees who have underestimated their need for these services. Explore your options for long-term care in the event that you may need additional coverage.

Home Maintenance and Repairs

Owning a home comes with ongoing maintenance costs. Whether you plan to relocate in retirement or stay in your current home, consider your house’s condition and any additional repairs it may need when you retire.

Unplanned repairs like a new roof or plumbing issues can put a dent in your budget. Set aside funds for home maintenance and repairs in your retirement budget and perform regular upkeep to prevent costly repairs.

Moving Costs

Relocating in retirement grants you the space you’ll need for your new lifestyle, but plan for any additional financial expenses, such as moving fees. 

Moving can be expensive, whether you're downsizing or relocating to be closer to family. Costs can include realtor fees, transportation, and purchasing new furniture.

Plan for potential moves and explore ways to save money. Before packing your belongings, declutter your home and donate unused items. You can also take advantage of any mover discounts and other ways to cut moving costs.

Expect relaxation when you retire, but don’t forget about the hidden expenses that come with this new chapter. Once you prepare for the unexpected, you can avoid the stress and hassle of managing your retirement life. 

Start a budget today to set aside an emergency fund for these retirement living costs.

Worth Saving? 3 Cost of Living Expenses You May Be Tempted to Cut Down

For many people, cost of living expenses chew through the lion’s share of their income. They get to the end of the month with almost the exact same amount of money. It can prove tempting to save money by cutting down on some cost of living expenses. There are, however, three of these expenses that aren’t worth the meager savings.

Food

There are good ways and bad ways for you to cut down on food costs. Good ways include coupons, buying store brands, and even the occasional bulk buy. Once you do these things, though, you might be tempted to simply start depriving yourself of more expensive food. Think fruits and vegetables during the winter months.

That’s the bad way to cut down on food costs because it will almost certainly affect your health. Your body needs the vitamins and nutrients found in fruits and vegetables. Depriving yourself of these increases the odds of getting sick, which will cost you in medical bills, prescriptions, and missed work.

Insurance

Sooner or later you’ll look at your insurance premiums and think they’re too high. You might say, “I don’t really need that much coverage, do I?” It’s easy to think that way when you’re in good health or haven’t had an accident recently. 

The problem is that it’s hard to predict health problems or accidents. Ditching better insurance coverage for cheaper premiums leaves you in a vulnerable position if anything goes wrong. 

You can find yourself on the hook for thousands of dollars in medical costs or replacing your vehicle out of pocket. You won’t save nearly enough on your premiums to make that a good trade. Plus, you can usually find better rates with another insurance provider.

Savings

Every budget should include money for savings. Ideally, it’s 10% of your take-home income. When things get tight, you can find yourself thinking that there are better uses for that money. “I’ll replace it later,” you think.

The problem is that money that’s not in savings can’t go into a retirement account like a Roth IRA. Even if you do replace those savings later, you can’t reclaim the growth that money experiences in a retirement account. 

No matter what you buy now, it’s rare that it can exceed the long-term investment value.
Many families live on tight budgets, even in a strong economy. 

When it comes to cutting your cost of living expenses, though, some cuts aren’t worth the savings. Food, insurance, and savings are three areas where you really are better off spending the money.

Cost of Living: How to Cut Back on Major Expenses

When the car breaks down, you have no choice but to fix or replace it. The same is true when it comes to your refrigerator or any other household appliance. 

While you may not want to shell out a lot of money to cover a major expense, there are ways in which you can keep the bill to a minimum.

Find a Roommate to Save on Housing

When you take on a roommate, you have someone to split your rent or mortgage payment with. However, you also have someone to split the cable bill, light bill and other associated expenses with. 

If you have kids or pets, your roommate may be able to help out with child or pet care, which could save hundreds of dollars more per month.

Buy Insurance to Cut Back on Medical Expenses

If you have need to have surgery or need dental work, you should buy an insurance or discount plan. 

With a good plan, you may pay little or nothing for your care. At a minimum, your deductible is likely to be less than what you would pay if you didn't have insurance. 

Local clinics may charge based on your income, and charitable groups may be willing to help pay for emergency expenses.

Go to the Junkyard to Find Used Car Parts

A junk or salvage yard, like U Pull & Pay, is a great place to find used car parts to fix your car with. Instead of paying $500 at an auto body shop, you could pay $50 or $100 for something that will work for months or years to come. 

In most cases, you can take a look at a location's inventory before you go there to ensure that it has what you need.

Garage Sales May Offer Great Discounts

Those who are looking for used appliances, car parts or other supplies needed for a major project may find them at garage sales. 

It may also be worthwhile to check out an estate sale or flea market to help you cut back on major expenses in your life. If you don't want to buy, it may be possible to rent an appliance or otherwise expensive item and pay on a weekly basis.

There is never a good idea to have to deal with a major expense. However, there are many ways to make paying for it easier if you know where to look. 

Buying insurance, perusing salvage yards and buying from garage sales may help you save money without sacrificing on too much, if any, quality.

The Cost of Living: United States vs United Kingdom

English: Blending of the flags of the United States and the United Kingdom. (Photo credit: Wikipedia)

Are you considering migrating to Britain and leaving your American homeland behind? It's perhaps not too difficult to understand why in these current times. It's not likely for instance that you'll see an American citizen receiving completely free healthcare or indeed tallying up how much money they'll receive from the government this month on a DSS Move Benefit Calculator. 

But before jumping to conclusions, you should be aware that many of the overall living costs in the United Kingdom are in fact far greater than in the United States. 

Food

In the United States, we are privileged to have a whole host of international delights fully absorbed into our mainstream culinary culture. From beef tacos to key lime pie, to pastrami sandwiches to the traditional US barbecue, there's not much that we haven't got covered. So surely all of this diversity must be expensive? 

Surely we can't expect to have all of these multicultural foods (in comparison to a fairly bland British offering) and actually pay less than the Brits do? Actually, you can. In a recent study analysing the cost of living in the United States vs the United Kingdom, guess who came up trumps? That's right, America. In fact, on average across the United States, our groceries cost 13.57% less than in the UK. Add that up over a few years and you'll see some big savings, or some big financial losses if you choose to head to Blighty. 

Rent

Well, food is only one of the chief costs of living you might say. The biggest cost is rent, so how does that compare? Even worse if you live in the UK. Yes, on average the cost of rent in the United States is 21.20% cheaper than in Britain, with 1 and 3 bedroom apartments in the city centre and outside of the city centre all costing substantially less than their British counterparts. 

Look at prices in the country and the situation is even worse. Someone living in Truro, Cornwall can expect to pay a whopping 70% extra on their rental cost than someone living in Little Rock, Arkansas. Whether you're receiving housing benefit in the UK or not, it's hard to argue with those figures.

Is the Grass Actually Greener?

Though the UK may seem like a good way of escaping some of the more difficult aspect of America, be aware that Britain is by no means without its own financial pitfalls.

Why You Should Consider Moving to a Small Town for Retirement

. (Photo credit: Wikipedia)

Traditional retirement has changed greatly in recent years, as many couples and individuals can no longer afford to keep up with their lifestyles while completely retired. As a result, these people are not fully retiring, but are rather going through with semi-retirement. 

This, however, is not necessary if you can make a few lifestyle adjustments leading up to your big day. One of the most effective adjustments that you can make is moving to a smaller city, as you will find that the difference in the cost of living could make full retirement more palatable. 

Selling Your Home

You might plan to sell the family home before retirement anyway, but if you are buying a condominium in the same city, you might not end up too far ahead. When staying in the city, your condominium could end up costing almost as much as your home, so you will not have much left over.

Some retirees choose to rent a place, but this constantly eats away at your retirement funds and does not provide a return on the investment. If you can sell your house in the large city and move to the suburbs or a smaller town in the same area, you could save hundreds of thousands of dollars. This money can then be put towards your retirement goals, which leaves you in much better financial shape. 

Cost of Living

In addition to the money that you make on the sale of your house, you will find that other expenses are far less in smaller cities. Since you will not have to drive as far to reach destinations, you will spend less on fuel. Things like restaurants and entertainment will be cheaper, unless you move to an exclusive suburb that has an inflated market. 

Quiet Lifestyle

Perhaps the main reason to relocate to a small town is the lifestyle that it affords. You will not have to worry about traffic and crime during your retirement, but can instead spend your time relaxing and enjoying the region.

You can go golfing multiple times per week without worrying about the course being overly crowded and can walk into your favorite restaurant, sometimes without even needing a reservation. The slower pace of life is much easier on you as you age, as you can avoid the big city problems that have plagued you during your working years. 

Checklist before Moving

Before you choose to move to a smaller center, you should consider a few things. First, make sure that you are close enough to visit your children and grandchildren before you go. Nothing is worse than moving on to greener pastures, only to find out that you miss your family and do not get to spend enough time with them.

Secondly, you should ensure that you have the right personality type to make friends in a new environment. You will be starting from scratch in your new town and you will not know anyone. If you struggle to make new friends or are introverted, you could struggle and become lonely very quickly.

Thirdly, you should look at the activities in your new city to see if they interest you. If you do not like fishing or swimming, moving to a beachfront community might not be your best option.

Overall, you have countless choices when selecting a retirement destination, so choose one that not only allows you to reach your financial goals, but your personal goals as well.

The High Cost of Living and How to Deal with it

It’s a given fact of life that day follows night and prices increase on a regular basis. For most people in the country, the cost of living is rising far more quickly than wages and pensions.

Insulation

If you look at your gas or electricity meter and it seems to be eating up money more quickly than you can earn then you need to see if there is any way that you can rectify the situation. Double-glazing is an effective way to cut down on drafts that come through the window and the current choice of double glazed windows doesn’t just restrict you to plastic. If your home hasn’t been insulated then see if there is some form of government

help through one of its ‘Green Deal’ schemes. Most of the UK’s energy suppliers also operate charitable trusts where you can apply for assistance. Some companies also include recommendations on their website for the construction of energy efficient commercial buildings, including Colorcoat-online. A badly heated workplace can be just as depressing as a draughty and cold house.

Shop around

Take a look at some of the money saving websites and see if you can find any good deals. Remember, to read all the Ts & Cs, this may be boring but it’s even more tedious to discover that you’re locked into a lengthy phone contract, for example, just because you couldn’t be bothered to read all of the small print. The current advice from the experts at EnergyHelpline is to try and source a long-term deal rather than a short-term contract. Alternatively if you’re trying to save money on food you should also try and shop around but you should weigh up if this is going to cost you more in petrol than the saving you hope you’re going to find.

Holidays

Holidays are absolutely essential to many people, but there are different ways of trying to get a good deal. You could always try and get a cancellation flight discount and as long as you are free to travel at short notice, this is a good option. If you try and book your holiday for a time other than children’s school holidays you may be surprised at the choices on offer.

Some people like taking long weekends in wonderful country house hotels, thanks to the sluggish economy you’ll see that most of these are offering wonderful reductions from their normal prices. If you can’t find a good bargain then ring up the hotel, offer to pay over the phone and haggle. It’s surprising how dew people use this option, but it is invariably successful.

Eating Out

Instead of having a three course a la Carte menu, opt for a taster menu. An increasing number of restaurants offer this choice and it’s a great way of sampling all the dishes on the menu. If you’re ordering dishes that you’ve never sampled before so much the better. The increasing popularity of gastro-pubs means that meals at these venues are first class, and often a lot more competitively priced than restaurant fare.

Bargains do still exist, you’ve just got to use your imagination and employ a spirit of adventure and then you may well be rewarded.

Plan Ahead To Enjoy Your Retirement

Many of us hope to enjoy our retirement years sleeping in as late as we’d like or filling our days with the passions and hobbies that were put to the side during our working days. Traveling, visiting grandchildren, and taking up new interests are all beckoning as retirement draws nearer. 

However, without some careful planning, living on a fixed income and a new form of healthcare insurance can pose a struggle that will dampen those dreams of retirement. Unfortunately, the majority of us are somewhat behind in our retirement planning and haven’t made a plan to help us transition successfully to retirement. Wherever you are on the path to retirement, the time to make a plan is now. 

Plan Each Step Before You Take It

Simple advice, right? Just as in a chess game, each move you make in preparing for retirement will have an effect on the next move. You will want to consider factors such as when to retire, the quality of life you hope to enjoy, the dreams you want to live out, and the situations that you need to prepare for. Each of these decisions will be easier to make when you have time to study the consequences and contributing factors.

1- When is the right time to retire? Your retirement age will be influenced by the legal age of retirement in order to receive Social Security and Medicare. It may also be affected by the number of years you have put into your current job or the level of tenure which you have attained. Retirement budgets are usually calculated based on your age, the amount of savings and other financial resources you’ve set aside, and the retirement income you have earned from your qualifying jobs. Utilize an online retirement calculator or consult with a professional retirement planner so that you can retire at the most beneficial age.

2- Work out a retirement budget. List any of the debts that you currently have, your costs of living, and any other necessary and desired expenses. Use this information to create a budget. Keep in mind any new hobbies or activities that you are hoping to engage in. If you are hoping to begin traveling, then you will need to calculate those costs ahead of time if you hope to be able to afford any trips.

3- Plan ways to reduce unnecessary costs. While most of us hope to enjoy the same manner of living that we had while working, this is far from guaranteed. Planning ahead is the first step in protecting your income. Learning how to reduce living expenses is the second step. When you reduce your costs now and set aside the extra money, you will be better prepared to handle the emergencies and other unexpected expenses that will invariably occur.

4- Learn to spend wisely. Before retirement, many of us simply live from paycheck to paycheck and spend only what is left after paying bills. Living on a retirement income may present a new problem, especially if a substantial part of your income will come from savings that you can access readily. You may wish to re-take financial classes that you once took as a new homeowner or when you first began investing. You should probably consider enrolling in a course that is specifically taught to educate men and women approaching retirement. With this information, you will be better prepared to make the decisions that affect you personally.

5- During retirement, it will be more important than ever to know how to save your money. Don’t spend as if you don’t have another twenty years ahead of you. People are living longer than ever before and you may need to plan for several decades of retirement. You may feel tempted to spend money up front thinking that your expenses will remain stable. However, many aging adults find that the costs of living for seniors rise suddenly due to increased medical bills and other expenses related to getting older. 

A Successful Retirement Plan

After working for most of your life, you hope to enjoy a stable and peaceful retirement. If you want to avoid depending on your children or making other sacrifices of independence, then plan ahead and carefully consider each step before you take it. With a well-thought out budget and the determination to stick to it, you will have the monthly resources to meet your bills and financial obligations. By developing habits of frugal spending and generous saving, you can feel more comfortable pondering the future years approaching.

BIO:

Lauren Hill is a freelance writer, wife and mother of 2 really awesome kids. She enjoys writing on topics affecting our everyday lives. When she finds free time, you can find her in the garden, driving her kids to activities or blogging at www.laurenqhill.com