If you’re looking for a blissfully relaxing retirement, avoiding last-minute stress and surprise expenses is key. Spend your days in a lounge chair on the beach — and not scrambling to cover an unexpected bill–by knowing which costs might catch you off guard and putting safeguards in place now to protect your money and peace of mind.
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To get some expert insight, we spoke to Trevor Houston, CEO of ClearPath Wealth Strategies, LLC. Below, he shares four unexpected retirement expenses to prepare for — and when a personal loan can help without derailing your long-term plans.
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Forgotten or Lost 401(k) Accounts
Lose your keys? No big deal. Lose a 401(k) plan? That could be thousands of dollars down the drain.
“I see this every day,” Houston said. “People change jobs and they leave their 401(k) behind. Years later, the company has changed, been sold or is no longer in business and BAM, lost retirement accounts. This is actually super common, as reported by Capitalize Research in 2023, there are over $1.65 trillion in forgotten accounts.”
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Unexpected Healthcare Costs
Once you retire, you say goodbye to workplace perks like employer-sponsored healthcare. Without employer insurance, even a basic doctor’s visit can come with high out-of-pocket costs.
“People underestimate the cost and even with Medicare, healthcare can be a huge expense,” Houston said. “They get so used to the benefits of working in Corporate America’s and things like dental, vision, disability and long-term care can erode your savings and be overlooked in the planning process.”
Real Estate Maintenance and Taxes
Living in vacation mode doesn’t mean the bills — or surprise expenses — stop coming. One broken AC or refrigerator and your retirement savings could take a serious hit.
“Your primary residence can be a great investment, but it also comes with ongoing costs like property taxes, home repairs and regular maintenance,” Houston said. “I have a client who is always draining her savings every year, little by little, because she wasn’t budgeting for them correctly.”
Cost of Aging
Americans are living longer and a longer life means paying more — nursing homes can top $100,000 a year, according to CareScout. Are you ready for that?
“A lot of people don’t think about long-term care,” Houston said. “They think they can just ‘figure it out’ when the time comes. But if you aren’t prepared, the cost of a nursing home and even in-home care can wipe out your retirement.”
When a Personal Loan Makes Sense
A personal loan won’t solve everything. But for big, one-time expenses, it’s often cheaper and less damaging than dipping into retirement savings.
“It’s an extra step since you’ve got to apply and qualify, but it doesn’t mess with your long-term goals,” Houston said. “Plus, if the interest on the loan is lower than what you could be earning in your retirement account, then you’re actually ahead of the game.”
How To Use Loans Wisely
Surprise expenses happen, but loans should solve a problem, not create a new one. Use once, pay fast and move on.
“If you’re in a cycle of borrowing just to pay for regular stuff like meds or doctor visits, that’s when loans become a trap,” Houston said. “But if something big comes up like a major home repair or medical bill, then a personal loan can help you manage it without wrecking your retirement future. Just make sure it’s a one-time thing and you’ve got a solid plan to pay it back.”
Used wisely — and not as a crutch — a personal loan can be a practical alternative to pulling from your retirement account.
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This article originally appeared on GOBankingRates.com: 4 Unexpected Expenses Retirees May Face and Why a Personal Loan Can Help
