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We’ve got to have a plan for how we are going to cover those costs for making our home space livable as we age and need more care and and have have different kinds of needs. Peter, good to see you. Welcome back everyone. Let’s talk through those five retirement costs that just keep climbing. I mean, these are just costs that keep climbing. Even if you’re not retired, this is going to hit you. >> Only five Aaron. >> Diving right in here. Rising costs throwing a monkey wrench wrench in
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everybody’s budget these days. But preparing for them now can help you build better and protect your nest egg as well. So, of course, number one, we have health care expenses, Peter. This is something that’s hitting almost everybody and it is the most unpredictable expense. And a reminder, Medicare does not cover everything, >> right? And we just did a separate segment on the rising cost of health insurance and the affordable care act subsidy cliff and how you know it could easily be 30 to $40,000 premed. Medicare
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the premiums every year have that cost of living adjustment. So they go up in price every year. Um, and then you get to long-term care, and the average in our area in in North Carolina can easily be 80 to $140,000 a year if you are in need of long-term care and uh depending on the varying degrees of care that you require. Um, but aside from that, I mean, the cost of everything healthare related is going up. Yeah. And you can see on screen that that map there showing those costs from inhome care, you know, uh, assistance a
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few hours all the way to actual nursing care need. And and that is an accurate and scary depiction. I mean, like you said, Aaron, health care, one of our largest potential expenses in retirement. Almost no telling what ultimately is going to be. Um, but my wife has had some health issues. So, I have spent more than my desired amount of time in the pharmacy lines and I have seen people dealing with this in the real world, you know, up at the counter debating are they going to buy their medicine or are they going to buy food
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that month? Um, and it’s it’s very difficult here. So we we just have to do our best to plan and prepare for the fact that this is a a an astronomical and everinccreasing expense that we are having to to shoulder all along the progression of our financial lives. >> Absolutely. All right. Expense number two is home modifications for aging in place. According to a recent AARP study, three out of four adults age 50 plus want to stay in their current home as they age. But Peter, of course, that’s
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going to take some changes around the house. >> Yeah, that that is costly to retrofit and make everything uh work and conducive for our aging needs and and lifestyle. uh ambulatory needs, being able to get in and out of a home or room to room or into the shower or or bathtub to to bathe. Um all of these things are basically remodel renovations that are climbing in price. And of course, yeah, I I I understand that it’s the desire for more people wish they could just stay in the comfort of what they know in
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their own home and what what they are used to. But the reality is that in order to do that, it costs money. In order not to do that, it costs even more money. We’ve got to have a plan for how we are going to cover those costs for making our home space livable as we age and need more care and and have have different kinds of needs for just getting around and day-to-day life. >> Number three on our list, car expenses. I feel like everybody listening can feel this one. >> Yeah, absolutely. I mean, cars are
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getting more expensive. Actually, going back to that last point, too, another thing I forgot, like we’re we’re we’re paying for people to take care of services for us, like the yard care that we used to do. You you outsource that and start paying for that, too. Just like with the car expenses, some of the things that we might have used to have been able to do ourselves, uh, you know, simple change of the oil, that used to be something that people often did themselves. And nowadays, you know, cars
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are computers more than they are, uh, engines almost, and a lot of people don’t have the knowhow to work on them or or to do do-it-yourself kind of fixes. And then the cars themselves, the all of those parts are becoming much more expensive as well to upgrade or to change or replace or just maintain. And so yeah, those car expenses definitely an expense that continues to climb >> like every other expense, but you know, it’s a bigger ticket item, so we notice it more. >> Right. Next, we have home insurance
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premiums. They’re on the rise almost exponentially year after year. I feel like this one is tough to prepare for. And also, um, Peter, I’m sure you have the conversation often with people who want to perhaps pay off their mortgage in retirement, and this is a cost and expense that you can’t run away from. >> No, no, you you still have to have insurance even when the home is paid off and now you don’t have that escrow. So, you’ve got to budget for that being a a rather large kind of annual payment that
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that you are going to be responsible for. And when we have, you know, whole states where insurance companies are moving out of them or refusing to cover coastal areas, North Carolina here, we’ve got the mountains, we’ve got the coast. You wouldn’t think uh hurricanes happen in the mountains, but we had Helen and and toward the coast. There are companies saying we just aren’t willing to take this risk of a major storm hitting this area. and they are moving out of the state completely which
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eliminates some competition and rises prices along with that. home values appreciate, the assessed tax appraisals go up and therefore the taxes, the insurance and everything that comes along with it. Uh a and then of course to do any of those modifications that we talked about, all of these things are interconnected, but they all are moving in one direction and it’s not one that is in our favor. When we talk about inflation, these are some of the biggest items and they do tend to hit seniors
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the hardest. I think inflation tends to hit seniors the hardest as you know they’re not out in the workforce negotiating a salary to coincide with costs of living. >> Right. Good point. And then last we have relocation costs for those retirees who do want to move. Right. In 2024 Americans spent an average of 250 on relocations. This is according to Anytime Estimates moving trend survey. I feel like that is a very low number. I’ve moved a lot in my life and boy do I wish I could have spent $2,000 on it.
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>> Yeah. that that’s like the Beverly Hillbillies moving company or something where you know you just strap your belongings on the back of your pickup truck because I’ve hired movers before and it’s nowhere in this kind of neighborhood. So I think this may be you know just the simple cross town moves are included in that average number but but I I I agree with you uh Erin. I think that that number is exceedingly low, but moving is expensive. And I do see that more people are moving. Get
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closer to the grandkids, get further away from the grandkids, get, you know, somewhere where they’ve always dreamed of going. Oh, I’ve always wanted to have a a house on the coast, so we’re going to sell our our house here and and move down there. Relocating is expensive. Um, but there there are a couple other additional big expenses. I know you you’ve got your list of five here which I think are appropriate, but kids and grandkids I think are are continually uh an expense item that more and more
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people are dealing with and and certainly taxes are probably our largest known expense in retirement and and people end up being shocked by how much they pay in taxes in retirement. >> Right. Right. No, I mean we could have done a list of 20 or 25 expens. Yes, it would have been. But, you know, I think again it comes down to proactive planning. I’m glad you mentioned taxes though because that of course will affect health care costs in retirement as well. There’s so much proactive planning that can be done. If somebody
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would like to sit down with you, Peter, talk through these expenses, how to prepare for them or mitigate them in retirement. How can they reach you? >> Well, give me a call. 919-3000-5886. 919-35886. And in in my conversations, I’m often talking to people who have done a good job of earning income and and getting some of that income uh put into investments and building there. But a lot of times those people have never reversed the flow and started creating income from their investments and
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understand how we have to make that last and and increase over time to account for these items getting more expensive. And inflation is the silent thief. It’s going to rob our purchasing power over time. Taxes is one of our largest known expenses. Most people have not quantified how much they’ll pay in taxes. And most people do not have a nest egg set aside to cover the extent of what health care can cost people uh into and throughout retirement, especially if we do encounter long-term care, which the stats on that are are
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scary as well. So you need to have a plan that maps all of that out reversing the direction, taxes, healthare, ultimately legacy. That’s what we call the optimized retirement plan and that’s where we start our conversations. Aaron, >> great Peter. Thank you so much for your time today. I really do appreciate it. >> Thank you Aaron. Always a pleasure. Hey folks, Peter Rashan here with Rashan Planning. So glad that you are enjoying the podcast Planning Matters Radio. You know, one of the tools that we’ve put
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out there that people really seem to appreciate and really are are finding of value is at 919 retired.com. It is your retirement tax bill calculator. If you’ve got any kind of retirement account, your tax deferred 401k or IRA, this is the website. This is the resource where you can go, you can plug in your own numbers, your information. You can slide the the the tool calculator up and down for your tax rate or your amount of savings and see what your tax bill is likely to be if you default and defer to the IRS’s plan
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versus what you could potentially bring that tax bill down to. A lot of times it is a very significant savings. So, if you have not yet, go to the website 919retired.com, run your numbers on the retirement tax bill calculator. This has been planning matters radio. >> The content of this radio show is provided forformational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to seek investment, tax, or legal advice from an independent professional adviser. Any
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investments and/or investment strategies mentioned involve risk, including the possible loss of principal. Advisory services offered through Brook Zone Capital Management, a registered investment adviser. Fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission which may result in a conflict of interest regarding
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compensation.
