13 Hard Truths About Retirement

Many people look forward to retirement, and after a long career, you should, too. But retirement may not offer the breezy, laid-back lifestyle you’d expect it to. Here are a few pitfalls you might encounter during your senior years.

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The average senior on Social Security today collects a monthly benefit of $1,543. If you’re used to living on a much higher income, then you’ll struggle during retirement if you rely too heavily on Social Security to cover your expenses.

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Ideally, you’ll enter retirement with a nice amount of money in a 401(k) or IRA. But if you’re not careful, you could end up depleting your savings prematurely. You’ll need to come up with the right withdrawal strategy to ensure that you don’t run out of money.

Many seniors are shocked to learn that it costs money to get coverage through Medicare. Though Part A, which covers hospital care, is free for most enrollees, Parts B and D, which cover outpatient services and prescriptions, respectively, charge a premium. On top of that, you’ll have deductibles, co-pays, and coinsurance to shell out for.

Original Medicare will not cover a number of commonly used health services, like dental care, eye exams, and hearing aids. If you sign up for Medicare Advantage, you may get coverage for these services, but then you’ll be limited to a more narrow network of providers.

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Many seniors enter retirement without a mortgage. But even if you manage to do the same, you’ll still pay to maintain your home, and you’ll continue to have property taxes to cover. Plus, as your home ages, repairs could sneak up on you.

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Many seniors expect their living costs to decrease drastically once they’re no longer working. But actually, the only major expense that’s likely to drop during retirement is commuting. Of course, you also won’t be making retirement plan contributions once you’re in retirement, but for the most part, expect your other bills to hold pretty steady.

Once you stop going to work, you’ll need something to do with your days. And keeping yourself occupied could prove costly, especially if you’re the restless type who always needs to be on the go. That could, in turn, put a strain on your savings.

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Working during retirement is a smart move -- it’ll keep you occupied and also help generate some income for you. But pulling it off may be easier said than done. Mobility issues could make holding down a job difficult, and if there’s limited job availability in your area, you may have to travel farther than you’d like to secure a part-time paycheck.

For some seniors, there’s such a thing as having too much spare time. If retirement turns out to be more boring and less fulfilling then you anticipate, you could end up struggling with real mental health issues.

Many common senior income sources are indeed taxable. These include pension payments, retirement plan withdrawals from non-Roth accounts, and, in some cases, Social Security benefits. Paying the IRS could prove exceptionally burdensome when you’re on a fixed income.

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Most seniors will end up needing some type of long-term care in their lifetime, and the cost could be exorbitant. Having long-term care insurance could help defray that cost, but that, too, is an expensive prospect.

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Some people dream of retiring at a certain age. But if you’re behind on savings or have debt, you may need to push off that milestone into your late 60s or beyond.

Nearly half of seniors end up retiring earlier than anticipated, whether due to health issues, job loss, or other factors. Retiring sooner could mean winding up short savings-wise, or having to claim Social Security early and cutting your benefits in the process.

Retirement can be a stressful period, but it doesn’t have to be. Plan accordingly so these factors don’t wind up hurting you at a time when you deserve to be enjoying your life, not worrying your way through it.

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