Many people assume that the amount they spend now is the amount they need to budget for during retirement. While that is a great place to begin in your planning, it is not necessarily the case. In fact, the amount you need during retirement can be quite a bit more. Here are a few factors to take into consideration when planning for your golden years.
Health and medical expenses are likely to increase over time. As you age, you may find yourself going to the doctor more often and may incur chronic issues due to various lifestyle choices of the past. Even with the best habits, unexpected medical situations can occur. Procedures such as hip replacements and physical therapy needs are examples of expenses many don’t realize they will have until after retirement, adding unexpected strain on your savings. You need to also take into account that vision and dental needs are not covered by Medicare but are both likely to be issues.
Another factor to consider is that you may end up living longer than expected. It is better to err on the side of caution when figuring out how long you will be retired to ensure that you don’t run out of money and spend your final years struggling financially. Plan ahead for the possibility that you may need an assisted living facility, a nursing home, or home care. Learn more about retirement planning with the following infographic.