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8 Things That Cost More When You Retire (and 3 Things That Cost Less)

Updated: Jan. 25, 2024

In retirement, 80 percent of your salary is supposed to be enough—but these unexpected expenses can lead you to blow through your budget. Here's what to plan for.

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Miniature people sitting on syringe wit stethoscoper and stack of coins, business and health care concept.

Health insurance could cost you more

If you’re used to working for an employer who covers part of your medical insurance premium, there’s a good chance your out-of-pocket health insurance costs could go up once you retire. Danielle Roberts, co-founder of Boomer Benefits, says that for many people in this situation, “health insurance gets more expensive when they enter Medicare. Medicare coverage costs $135.50 minimum—more if you are in a higher income bracket. This only covers 80 percent of your costs and you pay the rest in deductibles, co-pays, and co-insurance.”

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Life in old age

Care could cost you more

The average couple will need $280K just for healthcare costs in retirement, according to Fidelity. In addition to bearing the responsibility for a larger portion of your health insurance than you’re used to paying, health care, in general, may cost you more. Riley Adams, CPA and founder of Young and the Invested, cautions that “many people underestimate the amount of money they’ll spend in retirement on healthcare expenses. Few have this money set aside to cover the out-of-pocket costs not covered by Medicare or a supplemental insurance plan,” Adams says. “These healthcare costs are more expensive in retirement because as you age, you tend to require more medical care.”

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Miniature figure : Close up of group of younger traveler standing on visa stamps , backpack and travel concept.

Travel expenses can cost more during early retirement

As you’re dreaming about retirement, you probably have extensive travel plans focused around spending time with loved ones and seeing more of the world. Unfortunately, these big plans can come with big price tags. Brandon Renfro, PhD, a professor and financial planner, explains that “if you retire at a traditional age such as in your early- to mid-sixties you’ll likely be very active in those first years. Travel and vacations will all likely cost more since you’ll be doing more of them. You can account for higher early-retirement travel costs by looking at your total retirement spending plan. Plan to take larger withdrawals earlier and smaller withdrawals later, when you slow down.” Next, read how the FIRE movement has helped so many people plan their early retirement.

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Miniature people, businessman standing with mini house using as business and family concept

Property taxes can cost more during retirement

When you own property, your local government will charge you taxes every year based upon the value of that property. Since the value of real estate tends to go up over time, it’s likely that you could face higher property taxes after you retire. “There may be periods when property values decline, but in the long-term, real estate values tend to rise,” explains Logan Allec, CPA and owner of the finance website Money Done Right. “Your county assessor, of course, isn’t oblivious to this fact, and it’s quite likely that you will be paying more in property taxes during your golden years than you are today.” To prepare for this possibility, Allec recommends adding this increase to your planned retirement budget—before you stop working. He notes that you can also appeal property valuation increases. Add this to the 13 retirement facts you need to take seriously.

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A film crew shooting a love scene.

Entertainment expenses can cost more during retirement

One of the best parts about retirement is all of the free time that you get to fill with things that you enjoy doing. However, those entertainment costs might be more than you bargained for when you were building your nest egg. According to Andrew Herrig, founder of the financial-advice website The Wealthy Nickel, all the free time you have in retirement can lead you to spend more on entertainment expenses such as shopping, eating out, and other activities. “Without a good plan to fill the void of time left when you no longer have a 9-5 job, it can be easy to overspend,” he warns.

If you find yourself overspending, Herrig has some suggestions on how to cut down on expenses. “Make a plan before you retire of how you want to spend your time. Maybe take up an inexpensive hobby, such as gardening, or spend more time with family and friends. If you do plan to go out to the movies or to the mall, make sure to always ask if there is a senior discount!”

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Miniature people house

Housing can cost more during retirement

Although this isn’t true for every retiree, there’s a chance your housing expenses could increase in your golden years. Adams says, “If you move into an assisted living facility or need an arrangement with easy access to medical care, housing costs could be significantly higher during retirement. My grandmother moved from her paid-for house into an assisted living facility. She went from paying around $500 per month to maintain the house to almost $3,600 per month in an assisted living facility. The increased cost was beneficial for guaranteeing her access to healthcare 24/7, but the money spent was considerable.”

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Miniature people, husband and wife relaxing on mini house and stack cardboard boxes background using as logistics and home business concept

Relocating can cost more during retirement

Many retirees opt to downsize their homes during their retirement years. That can certainly save you money, but there’s a cost, too—moving expenses. Mike Glanz, CEO of HireAHelper.com, points out that relocation becomes tricky as you get older; you don’t want to risk a back injury from moving a couch. “For many, the only option might be to hire professional movers,” he says. “On average, full-service movers cost just over $2,500. On a fixed income, that’s pretty expensive.” One alternative Glanz likes: “A budget-friendly alternative is a hybrid move. It requires renting and driving the truck, but the professionals do all the heavy lifting for you. This option, on average, costs $910 after the cost of the truck. It can save you over $1,600 on average (not to mention a few trips to the chiropractor).”

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Miniature people, happy family playing together using as family concept

Family can cost more during retirement

As you get older, the size of your family is likely to grow. This can lead to some expenses you might not have anticipated before you retired. Allec says, “Don’t be surprised if the number of your grandchildren doubles or even triples in the first ten years after you leave the workforce!” How do the costs add up? “An expanding family could mean more money spent on travel to attend little ones’ births, birthday parties, recitals, and sporting events,” explains Allec. “You’re also looking at extra costs for holiday gifts, graduation gifts, and even wedding gifts. You may even be tempted to contribute to their college funds.”

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Miniature with taxi
yoannes surya/Shutterstock

Transportation can cost less during retirement

Thankfully, some costs also may go down during your golden years. R.J. Weiss, CFP and founder of the investment website, The Ways to Wealth, explains that “without a daily commute, retirees tend to spend less on transportation costs. This not only includes gas and maintenance but auto insurance, as well. The important thing is to do is to notify your insurance company that you no longer use your car to commute to work. You might be able to enjoy a reduction in your premium, thanks to the reduced mileage you’ll be driving.” Remembering to update your insurance is key. Watch out for these other deadly sins of retirement.

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Miniature people businessman standing on money with wooden background
Sirichai Puangsuwan/Shutterstock

Life insurance can cost less during retirement

In addition to the possibility of saving money on your auto insurance premiums, you might be able to save on your life insurance coverage as you enter retirement. Personal finance writer Cara Palmer points out that “you may not need as much life insurance during retirement since you no longer have dependents to support. As a result, you might consider reducing the amount of life insurance coverage that you have.”

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the mini figure play golf on big golf

Recreation can cost less during retirement

Although entertainment may cost more during retirement, moving to a retirement community with tennis courts, a golf course, and a rec center could save you hundreds of dollars on club memberships. Leslie H. Tayne, a financial debt resolution attorney and author of Life & Debt, suggests that if you can find the right retirement spot, you may be able to “downsize and find a great community with lots of activities—many of which are free and included with your monthly HOA fees. There can be so many great things to do that you don’t have to go far from home, spend lots of money or go broke.”