Without an employer-sponsored health care plan, high medical costs can come as a shock post-retirement.

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If retirement is the goal you've been working towards throughout your entire career, then there's a good chance you've made saving appropriately a priority; when the time comes, you know you'll be prepared to retire comfortably.

However, are there any retirement costs that may surprise you, post-retirement party, cake, and all, even if you have been judiciously saving all these years? Angel Radcliffe, award-winning financial educator, business strategist, and author of Ballin' On a Budget: Smart Money Moves To Enhance Your Savings, shines a light on two costs that people often find surprising in retirement.

senior woman using calculator
Credit: Olga Shumitskaya / Getty Images

Distribution from 401k or Other Pre-Taxed Retirement Accounts

Radcliffe shares that the money we have invested into our 401k while working is pre-tax dollars. In other words, the government hasn't taxed that saved money (yet), and it's been collecting compound of interest throughout your years of working. "As long as you start taking distributions after the stated retirement age, you will only be taxed and not charged a 'withdrawal fee,'" shares Radcliffe. "This is a big surprise to many who have not taken time to understand their financial planning or how distributions will work. So be sure you are saving to allocate money towards taxes as well."

Healthcare

While working, many become accustomed to coverage under an employer's healthcare plan. However, when you retire, that instantly goes away. Radcliffe says that at the age of retirement—and for all the years after—people frequent the doctor or need to seek additional medical care, so paying for your own healthcare post-retirement can cost as high as $800 a month. "If you plan to take advantage of the government supplies health benefits, be sure to plan for uncovered or unexpected medical costs as well. A good idea is to save 10 percent beyond your retirement goal for incidentals."

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