Question of the Month - The Prepare Institute: Preparing Americans for Retirement

Question of the Month

“I thought I planned very well for retirement and finally made the decision to retire last year.  Now, however, I seem to be hearing about all the scary things that could sabotage my retirement.  I think I thought of everything before I retired, but maybe I didn’t.  Are there any hidden costs or risks for retirement that many people do not think about?  Thank you.”  Carol

Well, Carol, I certainly understand your concern.  Many times after people retire they start hearing things from different sources, like friends, media outlets, social media and news programs.  This can start causing concern or worry, even if they have planned properly and securely. 

There are, of course, many risks and costs out there that could come up and hurt your retirement plan if they were not considered and planned for in your retirement plan.  In my experience, there are three main costs and/or risks that are often overlooked.  They are long-term care costs, other health care costs and taxes.  Let me address these three. 

Long-Term Care:  The reason this can be a problem is that many people think this is covered by Medicare, or they simply do not plan for this expense.  Unfortunately it is not, and Medicaid will not step in until you are basically dead broke.

Other Health Care Costs:   Most people are covered by Medicare in retirement, but Medicare does not cover everything.  There are still premiums to pay, deductibles to meet, co-insurance amounts, and other uncovered medical expenses.  All these additional costs can add up to a lot of money, and many people don’t realize this or do not plan properly for this. 

Taxes:  Many people think taxes go away in retirement.  They don’t, and sometimes, they even go up in retirement.

There are many risks that can sabotage a retirement plan, but these are the main three that sneak up on people from a lack of knowing about them or planning for them. To get a more detailed answer to this question or to get answers to your other retirement questions, visit The Prepare Institute website and find an upcoming retirement education course in your area.   

Content is for educational and informational purposes only.  It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should contact your retirement and tax professional before utilizing any of the information in this article.