A Big Retirement Planning Mistake

It is very common and good advice to know what your expenses are before you retire, meaning you're about to retire so you should know how much is going out every month. People often track this number. We use a spreadsheet. There are two types of expenses that often fall through the cracks in this process. Expenses that are occasional like once or twice a year and unbudgetable, unexpected one-off expenses. This list has examples of both.

1. Homeowners insurance and property tax

Once your house is paid off you pay these directly and these can be expensive.

2. Who does your taxes?

Having your taxes done professionally is well worth it IMO but it's not cheap.

3. Dentist

We don't have dental insurance. We are both lucky with our teeth. One exam is cheap, about $100, and the other is a little over $200 when we need X-Rays

4. Propane

In our area we heat with propane that gets delivered into a storage tank at our house. This one could maybe be paid monthly to break it up but all in it's at least a couple of thousand.

5. Small stuff too

Getting our chimney swept is about $200 and we have AAA for roadside coverage which is another $200.

6. Veterinary bills

So on to the unexpected/emergency expenses. We have always had a lot of dogs. Our vet is very reasonably priced but most are very expenses and every so often your dog or cat needs medical attention.

7. Home repair

A couple of years ago we had a $9000 roof issue at our rental and a couple of years before that we needed to replace the line from the house to the septic which cost about $6000. Last year we potentially had a $9000 expense in the house we live in from a direct hit of lightning. Fortunately the insurance company did the right thing but you never know.

8. Car repairs

Last year was a peculiarly unlucky year for us on this front but even then it was maybe only $2500 all in. We have two Toyotas, they are old but thankfully the problems are few and far between but again, you never know.

9. Something medical

The better your habits, the less likely this will come up but obviously any thing can happen to any one at any time. A couple of years ago I got a colonoscopy and had to pay out of pocket (we have crappy insurance). It was much cheaper to just pay directly rather than have them submit to insurance to only have the insurance company deny it, which I knew they would, several months later.

10. Something you need that you didn't know you needed

This is probably something positive. Very small examples from the last couple of years have been an air-fryer and also a leaf blower but there are probably better examples.