5 sneaky expenses that could derail your retirement

Congratulations, you’re retired! Now there’s more time for family and friends, travel, and hobbies. But have you considered how much this new lifestyle will cost? While spending in retirement decreases over time, mainly due to health reasons, the early stages often come with an uptick in spending, many of which we don’t account for in our financial plans. Here are five sneaky costs that can send your budget off-course in retirement.

A million-dollar smile?

As we age, keeping our pearly whites in top form becomes pricier. While fees for regular care are modest — some dentists will even reduce prices for retirees not covered by private healthcare plans — charges for root canals, tooth implants, veneers, and gum surgery easily rise into the thousands. Once retired, most people are no longer entitled to company health benefits that could offset these costs. According to a report by CBC Marketplace, prices for dental work in Canada vary widely. When a journalist visited 20 dentists in Vancouver and showed them her X-rays asking for a treatment plan, estimates varied from less than $200 to over $11,000.

Supplemental charge

Would you like a multi-vitamin with that? The market for vitamin and mineral supplements is estimated to be growing at a healthy 2.2 per cent until 2023 and was valued in Canada in 2019 at US$526.49 million, according to Statista. Seniors are especially susceptible to marketing campaigns that tell them they need supplements to maintain good health and to prevent illness. According to a 2017 survey, among older adults, 29 per cent used four or more supplements within the past 30 days.

Pity that there’s no evidence that money spent on vitamins has any positive effect on health. Essentially, consumers are peeing their money away. A Canadian study in 2018 looked at the role of vitamin and mineral supplements for the prevention and treatment of a range of cardiovascular diseases, such as heart disease or stroke, that often affect seniors. The researchers concluded that the supplements had no effect whatsoever on health outcomes, except in the case of B3 (niacin) which had a negative effect.

Busier than ever?

The new retirement mantra is “keep busy!” What used to be a time to kick back and enjoy a slower pace of life has simply become an extension of our jam-packed, pre-retirement lifestyle. This is due to a combination of habit (we’re used to being over-committed) plus medical advice about keeping up with physical activity to maintain good health, along with advertising campaigns targeting retirees as a core consumer group. Retirees feel the pressure to be busier than ever, and these new commitments cost money. This can include travel, hobbies, home renovations, gym sessions, volunteerism, and political activism, not to mention engaging with friends and family on a regular basis require substantial investments—and this is just to keep up with others’ expectations of what your retirement should look like.

Decoupling in retirement

The romantic image of a grey-haired couple walking hand-in-hand along a beach at sunset is common in advertising. Alas, it’s not the one that a growing number of older Canadians are posting on their Facebook feeds. According to Statistics Canada, the divorce rate among adults in the late-50s-plus age group is at 20 per cent making it the highest among any other cohort.

Whatever the reasons are for throwing in the towel, one thing is certain, grey divorce has a higher negative financial impact than separating earlier in life. In addition to reduced net-worth and higher living expenses, there is the loss tax benefits such as pension splitting, plus the legal costs of separation, updating wills and real estate transactions.

Long term care

We tend to focus about mortality, which is the length of life, but less so on morbidity which is our health condition during life. Many people live a long time with chronic diseases that affect their ability to look after themselves and that entail unexpected costs. Disabilities include dementia as well as physical ailments. For some people additional support could come from family members but it might require hiring a caregiver to visit the home on a regular basis or moving into a nursing or long-term care institution. Costs for these services can run very high — anywhere from $30 per hour for a home visit to thousands of dollars per month for residence in a nursing home. Low-income seniors are eligible for government subsidies, but these rarely cover all the costs involved.

Rita Silvan, CIM™️, is personal finance and investment writer and editor. She is the former editor-in-chief of ELLE Canada magazine and is an award-winning journalist and tv media personality. Rita is the editor-in-chief of Golden Girl Finance, an online magazine focusing on women’s financial success. When not writing about all things financial, Rita explores Toronto’s parks with her standard poodle.

Rita Silvan is a paid spokesperson of Sonnet Insurance.
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