dental-hygiene“Expenses plummet in retirement, and that is a good thing, because many retirees are getting by on half their pre-retirement income. But here is a disturbing fact: experts and retirees themselves readily identity six big expense categories that retirees should have set aside money to cover. But many did not. And now they regret that big time,” writes Robert McGarvey in an excellent piece for headlined 6 Big Expenses Retirees Didn’t Save For – But Should Have. Here are excerpts from two of the expenses outlined by McGarvey that particularly caught our eye:

“Taxes. Retirement is not a free pass to stop paying taxes. Thirteen states tax at least some Social Security income: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont and West Virginia. Seven states do not tax pensions — Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming — but that means 43 do. The IRS gets into this act, too, where Social Security income may be taxed if all income exceeds a specified base. The IRS also will seek to tax monies withdrawn from a tax advantaged savings plan. Many, many seniors – said multiple advisers – assume they will stop paying taxes when they retire. It just is not so, and budgets have to be constructed with the tax man in mind.”

“Dental Expenses: Medicare does not cover dental expenses and, sure, there are widely available dental insurance plans that are marketed to seniors. But check the coverage terms. A popular one caps coverage at $1,500 per calendar year and, of course, that’s plenty for cleanings, maybe a filling, possibly an extraction. But talk about implants and dentures, and suddenly you are into five figures of work.”