A comfortable retirement doesn’t come with a fixed price tag.

Your expenses will evolve over time—and some of the most important ones are easy to overlook. In fact, nearly 45% of retirees risk running out of money during retirement according to recent research from Morningstar [1].

The good news? That outcome isn’t inevitable. With the right awareness and planning flexibility, you can build a retirement that adapts as life unfolds.

Let’s explore five commonly overlooked expenses and how thoughtful planning can help you stay on track.

1. Overspending Day to Day

Small lifestyle changes can add up quickly.

A 2024 Employee Benefit Research Institute study found that nearly one in three retirees spend more than they can afford—almost double the rate from 2020 [2]. Meanwhile, only 59% have at least three months of emergency savings, and one-third face unplanned expenses that strain their budgets.

The challenge isn’t always inflation. It might be helping family members, spending more on travel, or simply adjusting to a new lifestyle.

Planning tip: Track your spending carefully, revisit your budget regularly, and build flexibility into your plan. A well-structured withdrawal strategy and cash reserve can help you enjoy retirement confidently—without jeopardizing your long-term goals.

2. Underestimating Healthcare Costs

Healthcare remains one of the biggest—and most underestimated—retirement expenses.

A 65-year-old retiring in 2025 could spend about $172,500 on healthcare alone, excluding long-term care [3]. Kiplinger reports that healthcare is typically the second-largest retirement expense, just behind housing [4].

And long-term care is another major factor: according to Genworth, the average annual cost of a private nursing home room in 2024 was $127,750, while assisted living averaged $70,800 [5].

Planning tip: Model realistic healthcare and long-term care costs into your plan. Consider supplemental insurance options, a dedicated healthcare savings strategy, and periodic reviews as your situation or coverage changes.

3. Overlooking Housing Expenses

Paying off your mortgage doesn’t mean housing costs disappear.

More than 11 million older adults spent at least 30% of their income on housing in 2021—a record high and a 15.5% increase since 2016 [6].

Even without a mortgage, expenses like property taxes, maintenance, insurance, and potential relocation costs can add up quickly.

Planning tip: Anticipate both ongoing and unexpected home-related costs. A proactive housing plan—whether staying put, downsizing, or exploring assisted living—can provide clarity and flexibility down the road.

4. Supporting Adult Children

Helping family is admirable—but it can quietly erode retirement savings.

About half of parents provide financial support to adult children, averaging nearly $1,500 per month [7]. Many say they’d even delay retirement or return to work to continue helping their kids.

Planning tip: Set clear boundaries early. Consider defining how much support you can sustainably offer without compromising your independence. Open communication helps align family expectations and protect your financial well-being.

5. Ignoring Hidden Tax Triggers

Taxes don’t retire when you do. Without a coordinated strategy, they can quickly eat into your income.

• RMDs (Required Minimum Distributions): Missing one can result in a 25% excise tax (reduced to 10% if corrected promptly) [8].
• Social Security: Claiming at 62 instead of full retirement age can permanently reduce monthly benefits by about 30% [9].
• IRMAA (Medicare Income-Related Monthly Adjustment Amount): Higher income levels can lead to surcharges on Medicare premiums, adding hundreds or even thousands per year [10].

Planning tip: A proactive tax strategy—coordinating withdrawals, Social Security timing, and Medicare planning—can help you retain more of what you’ve earned. Totemic Wealth & Planning works closely with clients’ CPAs to ensure every piece fits together efficiently.

The Bigger Picture: Flexibility is Freedom

Retirement planning isn’t about eliminating every risk—it’s about preparing for the unexpected.

Inflation, healthcare surprises, market volatility, or even family dynamics can all impact your spending needs. The most successful retirees aren’t the ones who predict every twist—they’re the ones whose plans can bend without breaking.

At Totemic Wealth & Planning, we believe resilience is the foundation of financial freedom.

If you’re unsure how much you’ll need to live your version of a dream retirement—or whether your plan is flexible enough to adapt as life changes—let’s have a conversation. Our team can help you evaluate your goals, model different scenarios, and design a plan built to endure.

📅 Schedule an introductory meeting to see if we’re the right fit to help you pursue lasting financial confidence.

Sources

1. Morningstar, 2025 — Most Boomers and Gen Xers Fear Running Out of Money in Retirement
2. Employee Benefit Research Institute (EBRI), 2024 — Spending in Retirement Study
3. Fidelity Investments, 2025 — 2025 Retiree Health Care Cost Estimate
4. Kiplinger, 2025 — Average Cost of Health Care by Age
5. Genworth, 2025 — Cost of Care Survey
6. Harvard Joint Center for Housing Studies, 2023 — Housing America’s Older Adults
7. Savings.com, 2025 — Financial Support for Adult Children Study
8. IRS, 2025 — Retirement Plan and IRA Required Minimum Distributions FAQs
9. Social Security Administration (SSA), 2025 — Retirement Benefits Guide
10. SSA, 2024 — IRMAA Premium Adjustment Guidelines