How much will a comfortable retirement cost you?
You may already have a number in mind, but the reality is often higher than expected. The good news: with thoughtful planning, you can prepare for the expenses that tend to catch retirees off guard.
Here are a few of the most common—and often overlooked—costs in retirement, along with ways to plan for them.
1. Everyday Spending
Spending habits often change in retirement. Without a steady paycheck, even small increases in day-to-day expenses can put more pressure on your budget than expected. Groceries, utilities, transportation and little extras like dining out or travel can add up quickly. In fact, nearly one in three retirees report spending more than they can comfortably afford.¹
How to plan: Track your actual expenses before retirement to create a baseline for your expected outflows. Once retired, compare your real expenses to this baseline to stay on track and build in a cushion for unplanned costs. Make sure to build in a cushion for unplanned costs so you can enjoy retirement with more confidence and less stress.
2. Healthcare Costs
Healthcare costs can be one of the most underestimated expenses in retirement, especially as prices for care continue to rise year after year. Even with Medicare, out-of-pocket costs for premiums, prescriptions, and uncovered services can quickly add up. That’s why it’s important to plan ahead—because a 65-year-old today may spend about $165,000 on healthcare throughout retirement, not including long-term care.²
How to plan: Build realistic healthcare expenses into your retirement projections and update them regularly. Be mindful of potential surprises—such as sudden long-term care needs, rising premiums for supplemental insurance, or new medical conditions that require expensive treatments. Planning conservatively gives you a buffer so rising costs don’t derail your long-term goals.
3. Housing Expenses
Even if your mortgage is paid off, housing costs don’t go away. Property taxes, insurance, maintenance, and the possibility of downsizing or relocating can all create new expenses. Nearly 11 million older adults already spend more than 30% of their income on housing.³
How to plan: Budget for regular upkeep as well as larger, unexpected repairs. Don’t forget to account for rising utility bills and insurance premiums over time. And if a move is in your future, include relocation costs in your plan so they don’t catch you off guard.
4. Supporting Family
Many retirees end up providing financial help to adult children or grandchildren. Nearly half of parents offer ongoing support—averaging about $1,400 per month.⁴ While it can feel rewarding to give, it’s easy to stretch your budget further than your retirement plan allows.
How to plan: Be clear about the level of support you can realistically provide and set boundaries early. This way, you can help loved ones without putting your own financial security at risk.
5. Hidden Tax Triggers
Taxes don’t disappear in retirement, and without a strategy you could end up paying more than necessary. Required Minimum Distributions (RMDs), the way you claim Social Security, and even your income level for Medicare can all affect how much you owe. For instance, missing an RMD can trigger a penalty of up to 25% of the amount not withdrawn.⁵
How to plan: Build a tax strategy that looks at the full picture of your retirement income. Coordinating withdrawals, benefit timing, and income levels with an advisor can help you avoid costly mistakes and keep more of what you’ve earned.
Preparing for the Unexpected
Retirement planning isn’t about eliminating every risk—it’s about building flexibility into your plan so life’s surprises don’t throw you off track. Whether it’s healthcare needs, lifestyle changes, or new family priorities, preparation today creates confidence and freedom tomorrow.
At First Community Trust, we help families anticipate these expenses and design retirement plans that are resilient, flexible, and aligned with the life they want. If you’d like to review your plan, we’re here to help.
Sources:
¹ EBRI, 2024 – 2024 Spending in Retirement Study
² Fidelity, 2024 – Retiree Health Care Cost Estimate
³ Joint Center for Housing Studies of Harvard University, 2023 – Housing America’s Older Adults
⁴ Savings.com, 2025 – Financial Support for Adult Children Study
⁵ IRS, 2025 – Retirement Plan and IRA Required Minimum Distributions FAQs