Saving for retirement is a guessing game. We all try to estimate in advance what our golden years will cost, but it’s impossible to know for sure until we get there.
Many retirees begin to realize this truth a few years into retirement. At that point, they can see that while they were on target in estimating some expenses, they underestimated others.
As part of its latest annual Retirement Confidence Survey, the Employee Benefit Research Institute asked around 1,000 retirees about expenses they underestimated before they entered their golden years.
Following are the most common answers.
1. Health or dental care
Retirees who said this expense is:
- Higher than expected: 38%
- Lower than expected: 10%
Some people mistakenly believe Medicare will cover all their health care expenses during retirement. Others think dental coverage is a part of government-managed Original Medicare, which is one of the two available types of Medicare (the other being Medicare Advantage plans from private insurers).
Both beliefs are false, as many retirees unhappily discover. For more, check out “Retirees, Beware: Medicare Will Not Cover These 11 Medical Costs.”
2. Taxes
Retirees who said this expense is:
- Higher than expected: 37%
- Lower than expected: 8%
Even in retirement, taxes are impossible to escape. Many people see their tax bills fall substantially in retirement, but that is not true of everyone.
In fact, some people find that their income in retirement is high enough that at least some of their Social Security benefit ends up going back to the government in the form of taxes.
Of course, you can lower this cost by choosing to retire to one of the states without any income taxes.
3. Travel, entertainment or leisure
Retirees who said this expense is:
- Higher than expected: 36%
- Lower than expected: 9%
Many workers dream of a retirement filled with travel to exotic locations. But once you arrive at the places you have dreamed about, the bills that go with them might resemble something closer to a nightmare.
So, before you begin to trek across the globe, check out our tips in “10 of the Best Travel Freebies to Help You Save in 2026.”
4. Housing
Retirees who said this expense is:
- Higher than expected: 35%
- Lower than expected: 9%
Very few people are surprised that maintaining a house can be expensive. But these costs are higher than many people expect in retirement.
In fact, housing costs are by far the biggest expense retirees face.
5. Long-term care
Retirees who said this expense is:
- Higher than expected: 20%
- Lower than expected: 4%
One of the thorniest questions in retirement is how to pay for long-term care should you need it. Medicare does not cover long-term care, which can be enormously expensive.
Long-term care insurance is one option for covering at least some of the cost, but is it the right option for you? Money Talks News founder Stacy Johnson has tackled this topic, and you can get his take in “Should I Buy Long-Term Care Insurance?”
6. Supporting or helping a family member
Retirees who said this expense is:
- Higher than expected: 18%
- Lower than expected: 7%
Some retirees have to step up to the plate financially to help aging parents. Others may have to unexpectedly provide money for struggling adult children, or even siblings or friends.
If you need additional cash during your golden years, it might pay to learn more about “The Most Overlooked Benefit of Gig Work in Retirement.”
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