8 Rising Costs Making Retirement More Expensive for Boomers
The baby boomer generation is not getting any younger, and despite being senior citizens, they might not be getting all the discounts they had hoped for at this age. Rising costs could make some major expenses more challenging for retirees to manage in the years ahead.
MoneyLion asked experts to weigh-in on what they believe are expenses boomers won't be able to afford in less than a decade. Here's what they had to say and why.
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1. Long-Term Care
Antwyne DeLonde, a financial advisor, shared that one of his clients had to make a tough decision when his mom needed nursing home care.
"The costs were shocking -- easily over $100,000 a year -- and Medicare didn't cover much of it. For boomers without a plan for long-term care, it's a real risk that could eat into their savings quickly," DeLonde explained.
2. Regular Healthcare Costs
"Most baby boomers are enrolled in Medicare, and they've probably noticed shocking increases in their prescription drug coverage," noted Melanie Musson, a financial expert with InsuranceProviders.com. "Those types of increases are likely to continue, making Medicare Advantage and supplement programs too expensive for many baby boomers to afford."
Even with Medicare, supplemental insurance and prescription costs are climbing every year, according to DeLonde. "One retired teacher I worked with shared how she had to start cutting back on leisure spending just to cover her rising healthcare premiums," he said.
3. Travel
"I've had so many clients dream of traveling the world after retirement. But now, with rising airfare and hotel costs, that 'trip of a lifetime' feels out of reach for many," said DeLonde. "One couple I worked with ended up opting for road trips closer to home, but it wasn't quite the same as their dream trip to Europe."
"Airfare reflects fuel prices and other rising costs," added Musson. "Within the next 10 years, baby boomers will likely retire and be unable to afford the higher cost of airfare."
4. Home Repairs and Upgrades
"I remember a client who delayed fixing their roof because the cost had nearly doubled from what they expected," shared DeLonde.
For boomers living in older homes, DeLonde highlighted that things like replacing roofs or adding accessibility features can become a real financial hurdle.
5. New Cars
The average price of a new car is almost $50,000, yet only looking to go up, according to DeLonde.
"I had a client call me in disbelief after shopping for a car to replace his aging sedan," the financial advisor commented. "He ended up buying used, but still felt like he overpaid compared to just a few years ago."
On top of that, car insurance will likely become unaffordable for most boomers on the road.
"Insurance premiums are increasing across the board, but car insurance rates have been increasing more quickly than other lines of coverage," Musson explained.
6. Groceries
"I've heard this from so many retirees lately: Grocery bills are just out of control," DeLonde reported. "One client joked that fresh produce feels like a luxury item now. Many are having to switch to less expensive, but less healthy, food options to make ends meet."
According to Musson, boomers are likely to have to depend on government subsidies to afford groceries because they won't be able to afford the rising costs of certain items like eggs and meat.
7. Helping Grandkids With College
A lot of boomers want to help their grandkids pay for college, but with tuition continuing to skyrocket, that's becoming harder to do, in DeLonde's opinion.
"I worked with one grandfather who had to scale back his contribution, and it weighed on him because he wanted to leave that legacy of support," noted DeLonde.
College isn't the only expense that's weighing on boomers. Overall, the cost of being a grandparent in America is only getting more expensive.
8. Staying in High-Tax Areas
In DeLonde's estimation, it might not be sustainable for boomers living in high-tax states to remain in their homes.
"I worked with one couple who loved their family home, but ultimately decided to move to a lower-tax state to stretch their retirement savings," shared DeLonde.
It's not all bad news though, noted DeLonde, sharing that boomers still have options to stay ahead of rising costs.
"Budgeting is key -- know where your money is going and focus on essentials," DeLonde advised. "I've also seen clients find success with part-time remote work or consulting.
"Retirement isn't just about saving -- it's about adjusting and finding creative ways to thrive. With some planning and flexibility, boomers can navigate these challenges and still enjoy this stage of life."
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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