7 Unforeseen Financial Obligations You Take On When You Retire

John Csiszar

Once you retire, you want your financial life to be as uneventful as possible. If you’re like most retirees, you’ll be living on a combination of investment income and Social Security benefits, and that income will be relatively fixed and predictable.

Read: 7 Bills You Never Have To Pay When You Retire

Learn: 4 Genius Things All Wealthy People Do With Their Money

This means that unexpected financial obligations can cause serious distress, as it might be hard to find a way to pay for them without going into debt. To avoid falling into this situation, it’s best to plan ahead and build a bigger emergency fund before you retire so that none of these expenses send you into a financial tailspin.

General Healthcare Expenses

It’s a fact of life that at least statistically, healthcare expenses rise as you age. The problem in terms of budgeting for retirement is that there’s no way to know just how high those costs will go. For this reason, it’s best to head into retirement expecting these so-called “unexpected” healthcare costs and to budget on the high side if at all possible.

See: 44 Best Small Towns To Retire in America

Elderly Parents

Even if you retire at 65, it’s entirely possible that your parents are still alive, and it’s also possible or even probable that they will need your assistance in some way. Oftentimes, this assistance comes in the form of financial aid. If you’re already struggling to live on your retirement budget, having to take care of your elderly parents might be enough to break the bank.

As you approach retirement, however, you’ll likely have a good idea of how much financial support you might have to provide for your elderly parents, and it’s important to incorporate this into your budget, if possible.

Long-Term Care

In addition to rising general healthcare expenses, many retirees will have to plan for long-term care. Research shows that up to 70% of adults 65 and older will need long-term care in their lifetimes, so it’s definitely an expense you should anticipate could arise after you retire. The national average median cost for long-term care ranges from $2,058 for adult day health care to $9,733 for a private room in a nursing home, according to Genworth.

Although it’s hard to budget for large expenses, knowing they are coming can help in the planning process. One of the avenues you might consider is getting long-term care insurance before you need it.

Adult Children

Just as you may have to foot some of the bills for your elderly parents, you might have to cover some costs for your adult children as well. Not all parents are willing to do this, and not all adult children need or ask for help from their parents. But it does happen fairly often. If you’re of that inclination, you should prepare for some of your retirement to go towards helping your adult children, whether it’s with buying a new home or simply getting by on a day-to-day basis.

A New Car

Although having your car paid off is a great way to start retirement, you should plan ahead for a time when that’s no longer the case. If you have even a 10-year retirement, you’re likely going to need a new car at some point.

While a “new car” doesn’t necessarily mean it has to be brand new, even if you buy a used car, that will be an added expense that may not be in your budget. Of course, you may not need a car at all, or you may use public transportation, but a new car is a common expense that flies under the radar of many retirees who do end up needing one.

Home Maintenance/Modifications

If you own a home, you’ll find that it needs maintenance as it ages, just as you do. As retirement can often last 30 or more years these days, it’s highly likely that you’ll need to spring for a few major home maintenance bills along the way. Most experts suggest that you’ll need about 1% of the value of your home every year for maintenance, but big problems like plumbing or roof repair may spring up as well if you live a long life, so those must be factored in as well.

If you have mobility issues in retirement, you’ll also have to budget for various modifications around your house, such as making your bathroom more accessible and perhaps installing a stair lift if it’s hard for you to get up and down between floors.

Potentially Higher Taxes

Once you retire, a few changes could result in higher taxes. Of course, if your retirement income is more than you earned during your career, you should expect to pay more in taxes. But some other life changes in retirement can also bring about higher taxes, such as moving to another state or the death of your spouse. This could put you in a higher tax bracket as you will have to file as a single taxpayer instead of filing jointly.

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This article originally appeared on GOBankingRates.com: 7 Unforeseen Financial Obligations You Take On When You Retire

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