You underestimated your expenses in retirement
Sure, once you retire, you’ll probably stop spending money on commuting, business attire and work lunches. But getting these expenses out of the way will only leave room for new ones, such as healthcare costs. More than that, your newfound free time will tempt you into spending more on leisure activities that you didn’t have time for while you were working.
As Americans become more aware of what healthcare means in retirement, many future retirees are scared and concerned about leaving the workforce at 65 because they don’t have the financial means to do so, says Danielle Roberts of Boomer Benefits.
According to a 2020 Fidelity Investments report, the average couple retiring at 65 will need around $285,000 for healthcare expenses alone. The expensive healthcare costs that many baby boomers haven’t taken into consideration when planning for retirement forces them to alter their retirement plans.
You’re heavily dependent on Social Security
Social Security is more than a retirement program. For many, it is the main source of income in retirement. However, Social Security was not designed to replace a person’s entire income but only around 40% of one’s income before retirement.
If you start collecting social security benefits earlier, you’ll receive a smaller check for the rest of your life. But even if you postpone collecting benefits until you’re 70, you’ll still not make the same money as you did when you were working 9 to 5. The conclusion: You’ll need to consider additional income sources such as part-time jobs or side gigs. On that note, check out these 10 Best Work-From-Home Jobs for Retirees to Boost Their Income.
