Many people work all their lives in the hopes of enjoying retirement. If you're nearing your golden years, you no doubt have lots to look forward to. But if you're not careful, a few sneaky expenses could wreak havoc on your retirement budget. Here are a few hidden costs to be aware of.

1. Taxes

Many seniors are shocked to learn that much of their income is, in fact, taxable. If you have a traditional retirement savings plan, whether it's an IRA or a 401(k), the withdrawals you take from that account will be taxed. The same holds true much of the time for pension payments (though there are some exceptions).

Furthermore, unless Social Security is your sole source of retirement income, there's a good chance you'll pay taxes on a portion of your benefits at the federal level. And if you live in one the 13 states that taxes benefits, you'll need to worry about losing a chunk of that income, too.

Senior man with serious expression takes notes while senior women with serious expression looks on


It pays to read up on the types of income that are taxable in retirement so you're not thrown for a loop when the IRS wants its share of your money. And if you want to lower your tax burden, shift some of your savings from a traditional retirement plan to a Roth IRA or 401(k), where withdrawals are always tax-free.

2. Long-term care

Many seniors don't expect to need long-term care, and as such, don't budget for it. But actually, an estimated 70% of Americans 65 and older will need some type of long-term care in their lifetime. That could mean having a home health aide for a couple of months, or it could mean needing nursing home care for a couple of years.

Either way, the costs you face could be astronomical. On a national level, the annual cost of a home health aide is $52,624 on average, according to Genworth. For an assisted living facility, it's $48,612. And for nursing home care, it's $90,155 for a shared room, and $102,200 for a private one.

If those bills sound scary to foot on your own, buy a long-term care insurance policy so that if you do wind up needing any of the aforementioned services, you'll have a means of defraying their costs. The ideal time to apply for a policy is in your mid-50s. That way, you're not paying premiums for too long, but you're also young enough to not only increase your chances of getting approved, but land a health-based discount on your premiums.

3. Boredom

When you go from a full-time work schedule to days on end with nowhere you specifically need to be, it can make for a very boring existence. And as such, you may feel compelled to combat that boredom by buying entertainment, whether in the form of movie theater tickets, golf course outings, or trips to different corners of the country.

Now you're probably well aware that you should be factoring the cost of entertainment into your retirement budget. But you may not realize just how little patience for downtime you have until you're several months, or years, into that stage of life and start to loathe the idea of sitting home watching TV all day.

The solution? Pad your retirement savings before you end your career, and also, be honest with yourself about your need to fill your days with activities. Some people are more content than others to spend time lounging around at home, but if that's not you, boost your nest egg or even consider extending your career a bit so you can entertain yourself adequately in retirement without putting your finances at risk. At the same time, look into volunteering. It's a great way to stay busy without spending a dime.

No matter how diligently you plan for retirement, you never know when a few unexpected factors could throw your budget off-course. Prepare to cover the cost of taxes, long-term care, and extra entertainment during your golden years. Accounting for these expenses in advance could save you a world of financial stress later on.