Congratulations—retirement is in sight. You’ve put in the hours, banked your savings, monitored your credit report, and protected your credit score. Now you’re ready to enjoy the reward you’ve been working toward all your life. Picture it: no more lunches and parking to pay for. Sweatshirts and jeans instead of expensive suits or dresses. No more money taken out of your paycheck for Social Security, Medicare, and your 401k. You’ll really enjoy the good life when you have fewer expenses.
But will you? Before your last day on the job, make sure you’ve accounted for the possibility of unexpected expenses after you retire.
Rising Travel Expenses
Although certain expenses may go down at retirement, others can easily go up. Travel is a good example. You finally have time to see the world, so you’ll spend more money doing it. Take advantage of senior discounts from airlines and hotels, and travel during non-peak times during the day or week; you’ll save money.
Spending More on Health Care
Health care costs may rise after retirement, too. You’ll probably find that Medicare doesn’t cover everything your employer’s health plan did, so be sure to account for those extra expenses in your retirement planning. You can also bundle health care expenses to get a tax break; ask your tax professional how best to do it.
Taxes after Retirement
On the subject of taxes, retirement is when you start taking out money you’ve been putting into IRAs and 401ks for all those years. If your plan requires you to take a distribution, you might actually see your income, and your tax bill, rise. Don’t get a nasty surprise—consult your tax professional before you start taking money out of your retirement plans.
Retirement is a time for doing what you’ve always wanted to do; you’ve earned the right. Buy what you want, go where you want, live your dreams, etc. But remember, increasing life expectancies mean that your retirement years might last a quarter-century or more. Make a plan now to ensure that your savings are as long-lived as you are. Part of that plan should involve making sure your credit report is as clean as your old desk on your last day in the office. If your credit score isn’t what you’d like it to be, a credit repair service such as Ovation can help. Give us a call today to talk with one of our knowledgeable representatives.