When planning for retirement, most people begin by estimating their regular monthly expenses such as housing, utilities, insurance, food, and transportation. But one of the most common issues I see when helping people plan their retirement income is that certain expenses are either underestimated or completely overlooked.

Understanding both core retirement expenses and irregular or overlooked costs can help create a more realistic retirement spending plan.

Retirement Plan: 10 Expenses to Consider

Part of the process of determining if you can afford to retire is to run the numbers to see if the amount of money you have saved plus any expected income you may receive from pensions and Social Security, will cover all of your expected expenses throughout retirement.

After working with people for many years, the one thing I have noticed is that many faithfully maintain spreadsheets of their day-to-day living expenses and use those figures to help build their retirement plans.  People often come to me to review their thinking when they are a few years away from retirement, to ensure they are on track to retire.

However, I often discover that people overlook the irregular expenses when planning for retirement on their own.   And it is the irregular expenses that can derail a retirement plan, and cause stress and sleepless nights.  The tricky thing, of course, is trying to see into the future and figure out what possible expenses can occur.

Here is a list of some of the potential items that you might consider adding to your retirement plan.  They won’t all pertain to you, but I hope they will get you thinking about what your retirement could look like and help you plan for your future.

Replacing cars

I often hear people say that they will just use the same car throughout retirement.   And if you do not work with retired people on a regular basis like I do, I can see where you might think that.  When you are pre-retirement age, retirement seems like a phase of life that is a mysterious unknown.  So I ask them how often they replace their car, and I usually hear answers like every 6 years or every 10 years, and everything in between.  A married couple that retires at 65 and drives until 85, replacing cars every 6 years,  will buy 6 cars in retirement.  I wrote a blog about the impact of inflation on car prices in retirement. Many people are very surprised when I show them the expected price of the last car they will buy in retirement.

Travel for fun

When I ask people what they want to do when they retire, travel is one of the first things people say.  If you see travel in your future, think about how often, and what type of travel, and do some internet searching to get a ballpark estimate of the cost that would be involved.

Travel to see the grandkids

Don’t forget about travel to see the grandkids, I mean, your adult children.  Who am I kidding?  You are taking a trip to see those adorable grandkids!  If your family is like so many these days, you might have to hop on a plane to feel those little arms wrapped around you.  With Skype, you don’t have to be there to see them anymore.  But no technology can replace an in-person visit.   Trust me; you will want to plan for this expense.

50^th Wedding Anniversary Celebration

In this day and age, fifty years of marriage is an especially wonderful milestone.  Some families have a dinner reception, inviting extended family and close friends, which can be the size of a small wedding reception.  I have also seen couples treat families to Disney vacations or to cruises.  If you have dreams of recognizing a milestone with a special celebration, don’t forget to plan for it so that when the time comes, you can relax and enjoy it.

Medicare

What?  Isn’t it free?  No, I am sorry to have to tell you, it isn’t.  And I find that I am often the first to break this news to people.   Because if they have never had to help a family member through the process of signing up for Medicare, and they are more than a few years away from retirement, then researching “How does Medicare work?” usually hasn’t crossed their mind.   Luckily, there are some good resources, such as www.medicare.gov and for Missouri residents https://missouriclaim.org/.

Long Term Care/Nursing Care

In 2026, the average annual cost of care in a nursing home in Missouri is approximately $80,000 to $91,000 per year, depending on whether the room is semi-private or private. The cost of nursing care has been increasing considerably faster than inflation. One way to offset the risk to your portfolio is to consider Long Term Care insurance that would cover a portion or all of the cost of care, depending on your risk tolerance and the affordability of the premium. I am a fee-only advisor, so I do not offer insurance products, but I have recommended that some clients get Long Term Care insurance. Other clients have been able to self-insure; each situation is different. But you do need to consider the impact a stay would have on your portfolio. 

Big delayed purchases

Have you been dreaming of a cross-country trip in a motor home?  Or does the water call your name so a boat is more to your liking?  Don’t forget to set aside some money for upkeep and repairs.

Home Improvements and Major Maintenance

If you are in your forever home, factoring in the large, inevitable maintenance projects, such as replacing a roof or HVAC system, will help prevent money stress later on down the road.  Also, after a few decades, kitchens and baths tend to need updates.  Remodels to age gracefully in place are also becoming quite popular.  Consider the age of your home and prior remodels when planning future income needs.

College and Wedding/Rehearsal Dinner

Depending on the age of your children, you may have college and wedding/rehearsal dinner expenses in retirement.

Care for a Family Member

Will a loved one be financially dependent upon you, such as a parent or a special needs child?  If so, you might consider meeting with an elder care attorney or estate planning attorney who specializes in special needs trusts.

These are a few areas to consider in addition to everyday living expenses when you are creating your retirement plan.

Overlooked Expenses in Retirement: Gifts and Travel Related to Gift-Giving Occasions

While people often plan for regular expenses in retirement, some irregular spending categories are easy to overlook. One example that frequently comes up in retirement planning conversations is the cost of gift giving and travel related to those occasions.

Many people who come to me for assistance with retirement income planning are on the cusp of retirement and have never tracked their expenses. If that is the case, no problem, we have methods to estimate spending to get a baseline estimate of your spending needs in retirement.

For those that are trying to get a clearer picture of retirement spending, I often see them list their regular monthly expenses such as utilities, insurance, food, and gasoline. But overlook the irregular expenses such as home and car maintenance, personal property taxes, gifts, etc.; expenses that happen on an irregular basis.

Gift Giving in Retirement

To help you think through what you might spend on gifts in a year, consider these items:

Consider your:

• Immediate family
• Extended family
• Friends
• Your children’s friends, teachers, coaches, etc.

Consider occasions:

• Christmas
• Hanukkah
• Birthdays
• Weddings
• Graduation
• Baby shower
• Hostess gift
• Funeral flower
• Get well flowers

Consider travel related to gift giving:

• Christmas
• Destination or out-of-town weddings
• Baby showers
• Funerals

What does this average you annually, divided by twelve? This gives you an estimated amount that you spend per month.

Retirement planning is setting yourself up to be able to afford the lifestyle and activities that are important to you. Part of that is determining what is important to you and how much it costs.

Final Thought

A successful retirement plan accounts for both predictable monthly expenses and irregular spending that occurs throughout the year. By identifying all categories of spending — including those that happen only occasionally — you can create a more accurate retirement budget and avoid unpleasant surprises later.