Many people dream of retirement as a time to relax, travel, and finally enjoy the fruits of decades of hard work. But according to Registered Financial Planner Christopher Cervantes, most people dangerously underestimate what it takes to retire comfortably—and that mistake can lead to running out of money when it matters most.
“One of the biggest blind spots in retirement planning is underestimating future expenses,” Cervantes tells Financial Adviser PH. “People often assume their spending will drop after retirement, but that’s not always true.”
The Hidden Costs of Retirement
Retirement may eliminate the daily commute, but other costs remain—or even increase. Healthcare is a big one. As you age, medical expenses typically rise, and without an employer-sponsored health plan, these can take a serious toll.
Travel, which many retirees plan to enjoy more of, also adds up. Then there are overlooked essentials like real estate taxes, home repairs, insurance premiums, and even continued mortgage payments. “Retirement isn’t cheap,” Cervantes warns, “especially if you want to maintain your lifestyle.”
Why Running Out of Money Is More Common Than You Think
Without a clear strategy, many retirees discover too late that their savings are insufficient. Some may be forced to rely on their children, downsize their lifestyle, or return to work—scenarios that no one wants in their golden years.
How to Avoid the Trap
Start with clarity.
Know exactly how much you’ll need per month to sustain your lifestyle—including inflation and healthcare costs. Factor in long-term obligations, such as insurance and taxes.
Plan for at least 30 years.
Retirement could last longer than you think. Build a strategy that assumes at least 25–30 years without a regular paycheck.
Balance risk and stability.
Cervantes recommends growing your money early through investments like stocks, then gradually shifting to bonds and income-generating assets as retirement approaches.
Use professional tools.
Consider retirement investment plans or mutual funds with insurance that convert into pension-like payouts. These “set it and forget it” tools are ideal for busy individuals.
Bottom line
Retirement isn’t about your age—it’s about your preparation. Don’t let false assumptions cost you your freedom. Plan wisely, spend intentionally, and make your golden years truly golden.
