15 Retirement Hiccups You Might Encounter

Retirement is supposed to be a laid-back, enjoyable period of life. But things don't always shake out that way. Here are some challenges you might end up facing -- and how to cope with them or prevent them in the first place.

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If you claim Social Security before your full retirement age, you could end up with a smaller benefit than anticipated. And that could make it harder to keep up with your expenses. If you don't have a lot in the way of retirement savings, you may want to wait to claim benefits until you've reached full retirement age (or even beyond, since delaying your benefits will result in a higher payday).

ALSO READ: Is Social Security's Full Retirement Age the Same for Everyone?

Social Security benefits are subject to an annual cost-of-living adjustment, or COLA. But often, those COLAs fail to adequately keep up with inflation, leaving seniors in a position where they lose buying power. To avoid that scenario, have savings on top of Social Security so you're not overly reliant on those benefits to cover your expenses.

Social Security's trust funds are expected to run dry by 2035. Once that happens, benefit cuts will be on the table. But if you save a lot of money independently, you'll be less reliant on Social Security, which means benefit cuts may not sting quite as badly.

ALSO READ: Social Security Cuts Are on the Table. Do These Things Now to Prepare

Many seniors are forced into early retirement due to factors like layoffs and health issues. It's a good idea to aggressively fund your retirement savings earlier on in your career, so that if your working years are cut short, you can still bring a sizable nest egg with you into retirement.

Some people opt to retire (or are forced to retire) before age 65. But Medicare eligibility doesn't begin until age 65, so you may end up having to pay a small fortune for coverage in the interim. Be sure to account for that cost -- and pad your savings so you're able to absorb it.

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Many seniors are shocked to realize how expensive healthcare is even once they're on Medicare. To avoid getting caught off guard, read up on Medicare costs ahead of retirement and, if possible, fund a health savings account during your working years so you can dedicate healthcare funds to tap later on.

When it comes to Medicare, you have options, and you don't have to stick with original Medicare, which commonly leaves enrollees with coverage gaps. It pays to look into Medicare Advantage as a more financially sound alternative to original Medicare. Though it's not right for everyone, it may be a good choice for you.

Many seniors inevitably wind up needing some type of long-term care in their lifetime. And the costs there can be prohibitive. That's why it could pay to secure long-term care insurance. The right policy could pick up a large chunk of the tab if you end up in a nursing home or assisted living facility for a period of time.

Many seniors assume that housing costs won't be an issue in retirement as long as they're mortgage free. But the expenses related to your home could rise over time (think property taxes, maintenance, repairs, and the like). That's why it could pay to downsize once you retire. A smaller property may cost less to live in overall.

ALSO READ: How to Know When It's Time to Downsize Your Home

Some seniors find that their auto insurance rates rise as they age. Plus, owning a car can get increasingly expensive when you factor in fuel costs and maintenance. The solution could boil down to retiring in a walkable city -- one that allows you to forgo a car and rely largely on buses, the occasional rideshare, and your own feet.

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You might enter retirement with a large amount of savings only to find your balance dwindling rapidly early on. To combat that, run some numbers to establish a smart withdrawal rate for your savings. Doing so could prevent you from depleting your 401(k) or IRA prematurely.

Some seniors make the mistake of dumping stocks in their retirement plan because they're volatile. Doing so, however, could lead to stagnant growth that limits your ability to take generous withdrawals. A better bet? Don't unload your stock holdings completely going into retirement. Rather, keep some stocks around.

When you're in the process of withdrawing regularly from your retirement plan, a stock market crash could be brutal. That's why it's a good idea to have at least a full year's worth of savings on hand in cash. That way, if market conditions deteriorate, you'll have the option to leave your investments alone and ride out that storm.

ALSO READ: 3 Reasons Not to Worry About a Stock Market Crash

Unless you keep your retirement savings in a Roth IRA, you'll be on the hook for required minimum distributions once you turn 72. Those could create a tax liability for you if your money is being held in a traditional IRA or 401(k). Therefore, you may want to put at least some of your savings into a Roth IRA to buy yourself more flexibility and minimize that tax blow.

Many seniors struggle to fill their days once they stop working. The solution? Don't stop working. As long as you're physically able, find a job that brings you enjoyment and that you can commit a few hours a week to. Doing so could help you stay active and socially engaged, not to mention pad your wallet so you have more options for paid entertainment.

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Although retirees can face their share of challenges, knowing what those are ahead of time puts you in a stronger position to address them. It pays to keep these potential hiccups on your radar so you can find a work-around -- before you wind up cash-strapped and unhappy during your senior years.

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