Great plans can come from the best retirement calculators.
A retirement calculator is a wonderful thing. It can help you forecast what you’ll need to live a comfortable life after your retire. And that allows you to make adjustments early to be sure all of your needs are met. One thing that a calculator can’t do is predict the future. And the future of a retiree might hold some surprises that you need to factor in.
You can plan for shopping when you want to, visiting family and friends when the mood strikes, or finally restoring a classic Mustang in your garage. But you’ll also need to think about some of the unexpected things that could pop up, so your calculator can give you a more realistic number.
You Might Miss Your Old Job
One of the biggest surprises that might happen once you retire is missing the job that you left. Believe it or not, a lot of new retirees aren’t happy without a job. And according to Bankrate, many of them either go back to their old job, or find a new job with the same or a new company.
Retirement isn’t always fun. For someone who is used to getting up every day and going to work, being at home can be mundane. You may find that it’s difficult to find ways to occupy your time.
If you go back to work after retiring, your financial situation can improve on what you thought it would be. By earning more income, you’ll add to what you’d already saved. And once you’re really ready to retire, you’ll have more to work with.
Traveling and Hobbies Can Be Expensive
At or near the top of many retirees’ list of things to do is traveling. There’s nothing but time for travel, with no job to report to and the kids grown and on their own. But traveling isn’t cheap; in fact, it can be quite expensive.
If you plan to fit a lot of travel into your retirement, it’s smart to learn about the realistic costs. A week’s vacation in a hotel at the beach while you’re still working is one thing. A month-long, cross-country trip in a rented RV is altogether something different.
It’s your retirement, and you should do with it what you like. Just be sure to include a healthy amount of savings into your plans to cover the expenses. If you budget for it early, you won’t find yourself settling for a cheap motel instead of a resort by a lake in Montana.
And it is not just travel, all interests and hobbies can come with expenses. In retirement, you are often spending your time on things that cost money instead of earning money. Coffee in the morning, a new book, green fees or equipment for your interest can add up quickly.
Health Care is Expensive, Too
The out-of-pocket health care expenses might surprise you once you’re no longer employed. According to Kiplinger, Medicare can be much more expensive than you realized. Medicare Part A doesn’t cost you anything out of pocket. That covers hospital benefits. But if you want to see your doctor for outpatient care, you’ll need Medicare Part B. Need prescription medication? You’ll also need Medicare Part D.
While Part A won’t put a dent in your retirement, Part B and Part D will. Also, there’s a limit to Medicare coverage. If you need gap insurance to cover what Medicare doesn’t, you’ll pay a premium for that as well.
Medicare plans also don’t cover long-term care. If you haven’t budgeted for the possibility of additional Medicare plans and special nursing facilities or other long-term care, it’s a good idea to add those to your retirement calculations sooner rather than trying to manage them later.
Family Members Might Ask for Financial Help
When you’re retired, family members and even friends might think you have plenty of money and not much to do with it all. It’s an unfortunate reality that retirees are sometimes relied on for a financial helping hand.
It’s not unusual to want to help out a child or grandchild once in a while. But when helping becomes a dependency, your savings could dwindle quickly.
Although you have saved and prepared for retirement and have something nice to show for it, you also no longer have income from work. What you have when you stop working is all you’ve got, aside from interest income and growth from investments.
Your Expenses Will Probably Not Be Constant
Research by financial planners has indicated that retirement expenses are high for the first few years after retirement and then decrease until the last few years of your life. The last two years of life can be the most expensive due to healthcare costs — especially for those who require long term care.
You’ve waited to retire for a long time. Once retirement finally arrives, it’s natural for there to be at least some things that you didn’t expect. Some of those things will be terrific. And some of them might make you worry about whether you’ve saved enough.
When using a retirement calculator, keep the above factors in mind. Some calculators will help you include these expenses and income — others will not.
