Costs That Could Go Up in Retirement, Part 2

9:41 am Uncategorized

From a recent U.S. News Money article, the following are the rest of a list of costs that could rise in retirement, and that need to be planned for:

Prescription drugs – This is probably one of the most worrisome areas for seniors, so if you are having problems understanding all the options available for Medicare Part D prescription drug plans, ask for help from family members or a professional.

Long-term care – Medicare Part A only covers the first 20 days of care; after that, you will have to pay $138 for the next 80 days and then cover everything yourself after that.

Household assistance – Many seniors need extra help with yard work, shoveling snow and general maintenance work around the house.

Taxes – After retirement, you will need to pay income tax on traditional IRA and 401(k) distributions.  After age 70 ½, you also need to be sure you take the required minimum distributions or you will be hit with a 50 percent tax penalty on the amount that should have been withdrawn.

Gifts – Holidays and birthdays don’t stop coming just because you are retired.  You will need to include a line item in your retirement budget for these items or plan for other ways to celebrate by giving your time or involvement in inexpensive activities with grandchildren.

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