Old Couple

Source: Flickr user Ian MacKenzie.

When it comes to planning for your retirement, you may assume you'll need roughly the same amount of money you live on today. That should give you a comfortable standard of living, perhaps even with money to spare, because things like your mortgage will be paid off -- right?

Not necessarily.

While your current expenses can help you predict your retirement needs, bear in mind that your circumstances will change somewhat between now and then, and those changes could be costly.

Yes, your mortgage may be paid off, and you'll no longer be paying for your children's education, but you could have a slew of new expenses you never had to deal with before.

To give you a better handle on what you can expect, consider these four expenses that often derail a retirement budget.

1. Health costs
You may think you won't have to worry about health care costs once you're in your golden years. After all, Medicare will cover everything, right?

Not so fast. Medicare will cover some of your health expenses, but not all of them. In fact, Fidelity Benefits Consulting estimates that a 65-year-old couple retiring in 2014 will need an average of $220,000 to cover health care costs throughout retirement.

You'll need to pay for deductibles and co-pays, for starters. You may also fall into the Medicare Part D "donut hole" -- a gap in prescription drug coverage that requires you to pay out of pocket. In 2014, you'll fall into this coverage gap after you and your plan spend a combined $2,850 on covered drugs. After that, you'll pay a percentage of the cost of your prescriptions until you spend enough that you're out of the "donut hole." (Check out this calculator to see if you're at risk.) 

2. Help around the house
You can save a lot of money by performing your own home renovations, repairs, and regular upkeep. But as you get older, this becomes harder to do. You may need to outsource tasks you can no longer physically handle yourself, such as cleaning your house, repainting the exterior, and maintaining the lawn.

How much will this cost? Rates vary, but according to U.S. News & World Report, homeowners spend between 1% and 4% of their home's value per year on maintenance and repairs. And when you're retired, you may need to hire more outside help, so consider budgeting toward the high end of that range. If you live in a $250,000 home, you can reasonably expect to spend $5,000 to $10,000 per year on upkeep.

Bear in mind that this average includes big-ticket items like new air-conditioning, but it also includes regular and seasonal maintenance such as lawn care, snow-shoveling, and gutter-clearing -- much of which you'll want to outsource during your golden years.

3. Household retrofits
You may also find yourself having trouble getting around your home the way you used to. It might be harder for you to climb a flight of stairs, for example, or to get in and out of the bathtub. This may require you to medically retrofit your home to accommodate items like a chairlift, a walk-in tub, or a wheelchair ramp. You may even need to widen the doorways to fit a wheelchair. These changes to your home can cost tens of thousands.

Let's focus on one example to give you an idea of the work involved. Imagine you need to use a wheelchair. Many homes have bathrooms with 24-inch doorway openings. Yours will need to be widened to 32 inches if you have a straight-on approach, or at least 36 inches if you need room to turn. You'll need to collect estimates from general contractors -- and perhaps even architects, if you're moving any load-bearing walls -- but the costs can reach the thousands.

Most homes are not designed to meet the specific needs of elderly or disabled people, and therefore they sometimes require expensive upgrades. However, there's a silver lining: Retrofits to your home (if they're medically necessary) may be tax-deductible if they exceed 7.5% of your adjusted gross income (or 10% of your AGI if you're subject to alternative minimum tax).  

Alternatively, some town homes, condos, and apartments are specifically designed for the elderly. 

4. Helping adult children and parents
If you're in the "sandwich generation," you may be in the unfortunate position of having to care for the generation below and above you.

In your 60s and 70s, you could find yourself caring for elderly parents in their 80s and 90s who need your assistance -- especially if they didn't save much for their own retirement and are now facing mounting expenses like assisted living.

In the meantime, times are tough, and more and more grown-up children are moving back home with their parents so they can search for a job or pay down student loans. This means you may still be picking up the tab for your adult children's groceries, utilities, and other expenses.

In addition to helping your children in a pinch, you may also find yourself tempted to help them pay for a wedding, make a down payment on a home, or send their kids to better schools.

Don't let your generosity bankrupt you. Set aside money now for these expenses or set up contingency plans that will soften the blow to your budget. Your college-graduate son may be welcome to borrow money to make a down payment on a home, for instance, but only with the understanding that he'll have to pay it back or that it will come out of his share of the inheritance.  

A few tips to help you through this:

  • Set clear expectations with your adult children about what expenses you will and will not cover. You might want to let them know, for example, that you'll let them live in your basement rent-free, but they will need to chip in for groceries and utilities.
  • Decide which major big-ticket items you want to cover -- and which you don't. You might realize it's not within your budget to pay for your children's weddings.
  • Help your own elderly parents in as many nonfinancial ways as possible, especially if you live near them. If they need serious assistance, look for nonprofit counseling.

Always think ahead
These added costs all have the potential to derail your retirement budget. But being aware of these financial landmines now can help you plan accordingly so that you're able to enjoy your retirement as much as possible -- no matter what unexpected costs arise.