5 Retirement Costs That Keep Climbing — and How to Prepare for Them

Plus, tariffs on imported materials are driving up construction costs, according to the National Association of Home Builders. That could raise remodeling costs for homeowners in the coming months.

How to prepare: “Get a home safety assessment done a few years before retirement or when health needs begin to change,” recommends Jeremy Clerc, CEO of Assists, an online marketplace for retirement and long-term care communities. A home safety assessment entails a professional evaluation of household hazards and provides recommendations for modifications to prevent injuries and accidents. “That way, you can prioritize [necessary] modifications and phase them in over time, spreading out the costs,” Clerc says. Aging-in-place specialists and occupational therapists offer assessments, which typically cost around $200 to $400.

3. Car expenses

If you own a vehicle, gas, insurance and maintenance don’t disappear when you retire — and these expenses could increase, depending on how frequently you plan to travel to, say, visit family or take road trips.  

New costs can crop up as driving abilities change with age. You may need to make vehicle modifications, such as installing a swivel driver’s seat for easier access. These changes can cost hundreds or even thousands of dollars, according to the National Highway Traffic Safety Administration.

Moreover, auto insurance rates are rising. The national average cost of full-coverage car insurance is expected to tick up 4 percent by the end of 2025 and could rise by 7 percent if prolonged tariffs lead to higher losses for insurers, an Insurify study found.

How to prepare: Driving isn’t the only way to get around in retirement. “Explore community ride programs or senior‑transport services for more affordable options,” End suggests. “Even some Medicare plans will offer services, such as Uber rides to doctor appointments.” Depending on where you live, there may also be volunteer programs that provide free transportation to older adults.

4. Home insurance premiums

Home insurance costs are rising across the country. The typical homeowner’s annual premium increased by an average of 24 percent between 2021 and 2024, according to the Consumer Federation of America. Skyrocketing rebuilding costs are a major factor behind rising home insurance rates. Home reconstruction expenses — how much it costs in supplies and labor to rebuild a home — jumped 4 percent from July 2024 to July 2025, according to an analysis by Verisk, a data firm that tracks the insurance industry.

Weather-related damage is also leading insurers to raise premiums as natural disasters become more common and more destructive. Industry analysts expect the trend to continue: Insurify forecasts an 8 percent increase in 2025, which would push the national average to $3,520.

How to prepare: Review your home insurance policy annually and shop for quotes to ensure you’re getting competitive rates. Consider increasing your deductible to lower monthly premiums, but make sure you have enough emergency savings to cover the higher out-of-pocket costs if you need to file a claim.

5. Relocation costs

If you’re planning to move when you retire, brace yourself for a big bill. In 2024, Americans spent an average of $2,050 on relocations, according to Anytime Estimate’s 2025 Moving Trends Survey. Long-distance moves cost even more. Those who moved more than 100 miles shelled out an average of $3,291 — nearly double the $1,666 Americans spent when moving less than 100 miles away.  

Looking to hire a professional mover? According to SmartMoving’s 2025 State of the Moving Industry report, 66 percent of moving companies said they planned to increase prices this year, up from 56 percent in 2024.

If you’re planning to move to a continuing care retirement community (CCRC), be prepared to pay a hefty entrance fee. Many of these communities, which provide a variety of care — from independent living to assisted living to nursing homes, all on one site — charge one-time upfront payments, with the average entrance fee clocking in at $477,721 in 2025, up from $455,325 in 2024, according to the National Investment Center for Seniors Housing & Care, which tracks costs at approximately 1,100 CCRCs.

How to prepare: If you’re planning to move yourself, create a detailed budget that encompasses all expenses, from packing supplies to rental truck fees. (Costs for packing materials such as tape, boxes and bubble wrap are up 28 to 45 percent since 2020, according to an August white paper by the International Association of Movers.) If you’re going to hire a professional mover, get quotes from several moving companies well in advance to find the best deal, and set aside an extra 20 percent buffer for unexpected expenses that may arise, suggests Robert Esposito, author of Nobody Move (Without Reading This) and founder of Relocators, a moving company based in Hauppauge, New York.

The key takeaways were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.