Top 6 retirement expenses employees overlook

The vast majority of your employees don’t want to work during their golden years – no matter how much they love their jobs. They want to sip margaritas on some tropical beach. And to help them get there, make sure they’re planning for these expenses.
The financial wizards over at identified five retirement expenses workers overlook most often when calculating what they’ll need in retirement.
In addition, we’ve added one of our own to the mix.
Expenses to plan for
Planning for these will increase retirees’ comfort and stability in retirement:

  1. Medical costs. It’s no secret these are skyrocketing. One thing workers need to do: Look at their own health risks, genetic info and family medical history, and ask themselves if Medicare will meet all of their needs. If not, it’s time to look at other forms of coverage (and how much they cost) to fill in the gaps.
  2. Housing expenses. One great piece of advice from the pros at Investopedia: Workers should get their homes in resale condition before they retire. This will cut down on maintenance costs in retirement. Roofs, windows and home mechanicals are expensive. It’s also smart to set aside funds for upkeep (like landscaping and snow removal) in case retirees become unable to do it themselves.
  3. Taxes. Remember: The funds withdrawn from a 401(k) are subject to taxes. So a balance of $500,000 isn’t really worth $500,000 in spending money.
  4. Leisure. What do workers plan on doing in retirement — join a club, golf, take up a hobby? It all costs money.
  5. Family. If your employees waited until later in life to have kids, there’s more of a chance a child will return home to live with mom and dad after college if the child can’t find a job (a strong possibility in a market like this). Other questions to ask: Do employees plan on lavishing gifts on their grandchildren, or … gulp … paying for a wedding?
  6. Travel (bonus) This is one large expense that could arguably be filed under leisure or family. But we think it’s best to account for it on its own. Oil prices, like medical expenses, are climbing. So driving to the golf course, flying to that tropical beach or paying the family a visit will all take a chunk out of the nest egg.