Personal finance

3 Retirement Expenses You May Be Underestimating | Personal finance






(Christy Biber)

When planning for the income you will need in retirement, it is important to consider all account of your essential expenses. Unfortunately, far too many people ignore three of the biggest costs they are likely to face in their later years.

To ensure that your investment account doesn’t fail to provide the necessary funds, make sure you have a realistic plan to cover these three big expenses.

Image source: Getty Images.

1. Health

Savers in retirement often assume that Medicare will cover health care costs for them — or that they won’t need much more to pay for expenses that Medicare doesn’t.

Unfortunately, this is a huge mistake, as retirees can expect to incur considerable health care expenses in their later years. This is especially true for those who develop health problems at a relatively young age or for anyone who needs a lot of prescription drugs.

When seniors underestimate the amount of money they need for care, it can have disastrous consequences. In fact, a recent survey found up to one in seven people on Medicare were forced to return to work to cover health costs. And that may actually be the best-case scenario, because people often face some of their biggest and most unaffordable medical expenses after they’ve grown too old or sick to work.