3 Ballooning Costs Too Many People Underestimate In Retirement

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• You'll still have expenses in retirement, no matter how much money you've saved.
• Many people underestimate the cost of expenses like healthcare and home maintenance.
• They also tend to underestimate how many years they'll live, and risk running out of money.

Financial experts constantly discuss saving enough money to enjoy your retirement, but is saving money enough? Maybe, maybe not.

Expenses don't go away when you're retired. You'll be spending money to take care of yourself … just without income coming in. You may be prepared for costs like your home, car, and utilities, but what about those expenses that you may not have thought about?

Lynnette Khalfani-Cox, a personal finance expert and author of "Bounce Back: The Ultimate Guide to Financial Resilience," spoke to Business Insider in 2023 and said that too many people underestimate a few different expenses during retirement — and they can really cost you money.

1. Home maintenance

"I tell people all the time to plan to have their home expenses taken care of heading into retirement, which for many means paying off the mortgage," Cox said. "But you have to take it a step further and plan for home maintenance as well. Home maintenance and the expenses around that are often the biggest part of homeownership, and that will not change in retirement."

I can personally attest to this. My parents are retired. When their home needed to be painted, it cost them $3,000 that had to come out of retirement savings. Cox explained: "When thinking about that number you think you will need to retire comfortably, add in home maintenance expenses, painting, lawn care, appliance repair and replacement — all of the steps you took to maintain your home while you were working, you will still need to do that when you are retired."

2. Long-term healthcare

"Even if you retire with healthcare, health insurance is not what it used to be," Cox said. "If you need medical care, medicine, or surgery, that can add up pretty quickly. If your health insurance doesn't cover all of it, there will be out-of-pocket expenses that you will have to pay. Your health can look very different from 45 to 65, so think of what additional money you might need to have saved if you need long-term healthcare."

3. Outliving your money

Cox said that your retirement may not look like your parents' retirement. "To really retire and not work at all?" she asked. "The number for that will be very different from the number 25 years ago. People are living longer, and more and more people are living to 95 and 100 years old. It's important to start saving for retirement as early as possible and to create multiple streams of income. There aren't pensions anymore, so you have to set yourself up to have enough money saved to carry yourself for at least 20, and maybe even 30, years."

Don't know where to start? Consider a financial advisor. 

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This article was originally published in December 2023.