When most people picture retirement, they focus on the big picture — where they’ll live, how they’ll spend their days, and what their income will look like. But small details can have a big impact on how comfortable those years feel. Here are three common expenses that often slip through the cracks when estimating what retirement may really cost.

1. Out-of-Pocket Healthcare Costs

Turning 65 and qualifying for Medicare is a major milestone, but it doesn’t mean all healthcare costs disappear. You’ll still have premiums for Part B and possibly additional coverage such as Medicare Advantage or Part D for prescriptions.

What often catches retirees off guard are out-of-pocket costs — things like copays, coinsurance, dental care, vision exams, and hearing aids, which original Medicare doesn’t cover. Setting aside funds for these regular expenses can help prevent unpleasant surprises later on.

2. Taxes

It’s easy to overlook taxes once regular paychecks stop arriving, but taxes don’t go away in retirement. Withdrawals from traditional IRAs and 401(k)s are typically taxable, as are earnings from brokerage accounts, CDs, or savings accounts.

Depending on your income sources, your tax bracket may change once you retire. Taking time to understand how different accounts are taxed — and how that might affect your income — can help you make more informed choices about when and how to access your funds.

3. Increased Spending on Leisure and Hobbies

One of the joys of retirement is having the time to do more of what you love — travel, hobbies, dining out, or simply enjoying time with friends and family. These activities, however, often come with added costs that can add up quickly.

On the other hand, you may also find you’re saving in other areas, such as home projects or cooking more at home. The key is to keep your budget flexible and realistic, especially in the first few years of retirement as you settle into your new rhythm.

Accounting for these often-overlooked expenses can make your retirement income go further and help you feel more confident about your financial future.

At Penny Lane Financial, we help individuals explore strategies that can strengthen their retirement income — through tools such as annuities, reverse mortgages, or structured income options that can complement Social Security or pension benefits.

If you’d like to review ways to make your income last longer, reach out to our team — we’re here to help you understand your options and make informed choices for the years ahead.