If you’ve faithfully saved for retirement over the years, it’s wise to sit down and go over your finances before you leave your job. You’d be surprised to learn how much money you spend on hidden costs, including management and service fees tied to your retirement accounts.

“It’s amazing how much some of these fees can wreck your retirement nest egg over the course of 30 to 40 years,” points out Gary Scheer, a retirement financial advisor. Add in the subtle charges that can arise in the long run, and your overall savings could be badly affected.

Here are 10 hidden costs to watch for during your golden years and how to manage them.

1. Annuity Fees

When you buy an annuity, the salesperson involved will get a commission. Expect to also pay for management and underwriting expenses. According to financial experts, whether variable or fixed, annuities often have higher fees than the typical mutual funds that you invest in.

That’s because annuities provide guarantees for your principal balance as well as your guaranteed growth. These guarantees are basically your assurance that you won’t lose your principal balance and will get a certain return on investment each year.

Another hidden cost can arise if the market outperforms the rate of return you’re getting. For example, if you’ve purchased an annuity with a 6% guaranteed return on investment and the stock market earns 21%, you’ll lose 15% growth.

2. 401(k) Expense Ratios

Many employers offer 401(k)s, but many of the employees who contribute to these retirement savings plans don’t know that they aren’t free. Depending on the funds you choose, you could be stuck with some pretty high expense ratios that will slowly drain your retirement savings.

What’s even worse is that these expense ratios may not be explicitly stated to you, but rather buried in the fine print. This hidden cost may be between 0.5% and 2%, which doesn’t seem like much. However, a 2% expense ratio accumulates at an exponential rate in the long run, which can work hard against you.

This being said, when choosing funds for your 401(k), look for those with low expense ratios to avoid losing money in hidden costs and fees.

3. 12b-1 Fees

Some mutual funds charge 12b-1 fees, which are fees for distribution, marketing, and operational expenses. While these costs are usually included in a mutual fund’s expense ratio, they tend to be hidden costs that most investors overlook.

12b-1 fees were initially meant to help investors yield lower expenses and higher assets. However, not everyone thinks like this, as some people argue that 12b-1 fees can reduce your returns instead of boosting your fund’s performance.

In 2016, the Securities and Exchange Commission instituted proceedings against First Eagle Investment Management, an independent asset management company that reportedly used investors’ mutual fund assets to cover “marketing and distribution costs.”

4. Loads

As an investor, you may be subject to some hidden costs when selling or buying certain types of mutual funds. These fees are called loads, and they can be paid at the time of sale (back-load) or at the time of purchase (front-load).

For instance, with a front-end load of 3% on a $5,000 investment, $150 goes into the sales fee, and $4,850 will be invested.

Back-end loads are redemption charges, or deferred sales charges, that arise when a fund is sold before a certain date. These types of loads tend to be lower the longer a person delays selling the fund. According to Morningstar, in the first year, back-end loads start at about 5 to 7%. They go down to 0% in the following five to seven years.

It’s important to point out that not all mutual funds come with these kinds of hidden costs. So if possible, choose a no-load fund instead.

5. Home Costs

When you retire, if you decide to stay in the house where you raised your children, you may need to make unexpected repairs during the following years as the house ages. You may also need to make adjustments for aging in place, such as adding a downstairs bedroom or walk-in shower.

In some regions of the country, you could also be spending more money on your property taxes than you need to. Financial advisors recommend looking into property taxes that may freeze or go down for retirees in your area that you may be able to qualify for.

Ask at a community senior center or check online to learn what tax breaks are available for seniors to avoid hidden costs.

6. Advisory Fees

Although financial advisors need to pay rent and eat just like anyone else, the rhetoric they usually use to communicate how much you’re being charged may be a little too inconspicuous.

“Basis points” is a phrase advisors often use, which basically means “tiny fractions of a percent.” For instance, 1% comprises 100 basis points, which means that a 50-basis-point fee equals 0.50%.

An advisory fee of 1% of assets is typical, but it’s important to understand what 1% will cost you. In other words, these kinds of costs are more likely to be hidden fees because people tend to overlook them.

Let’s say your portfolio is worth $500,000. If your financial advisor charges you 1% in advisory fees, you’ll have to pay about $5,000 annually, which is a lot! To find out how much you’re paying, ask for your total annual charges. Then compare that amount to the service you’re receiving to determine if you’re OK with the fees.

Keep reading to discover other hidden costs you may face during retirement!

7. Taxes

When you start to enter retirement, taxes will likely rise to the top of your list of expenses. 401(k) plans and traditional IRAs can be tax-deferred, which can help you boost your savings. However, once you start making withdrawals from these accounts, you’ll have to pay taxes on them.

Interest earned through retirement savings accounts is taxable at your ordinary income tax rate, and so may be the income that some bonds generate. You may also pay taxes on any profit you make from selling an investment.

Financial experts recommend maximizing your IRA and 401(k) options first before investing in taxable accounts such as bonds and mutual funds. This will help you avoid any hidden costs and fees.

8. Car Insurance

Other hidden costs that may drain your retirement savings are car-related. If you have two cars, chances are you’re only using one for most of your outings during your golden years.

And if you have one car, you may not drive as much as you did when you went to work every day. As a result, you may find yourself paying some hidden costs and wondering where your money is going. Well, why pay for car insurance coverage if you no longer need it?

Get an appointment with your insurance carrier and see if there’s any way to reduce your costs. You may get a discount for the amount of usage on the car, your driving record, or for belonging to an organization.

9. Uncovered Health Care

Even with Medicare, it’s no surprise that health care can be quite expensive in retirement. Yet many seniors don’t fully realize how much, in part because they think Medicare provides more coverage than it actually does, financial experts say.

The standard Medicare program comprises Part A, which provides hospital insurance, and Part B, which covers medical services like doctor visits. Many other services and expenses you may believe were routine—such as hearing, vision, and dental care, as well as prescription drugs and copays—are only covered by supplemental plans, which cost extra.

These medical services and expenses tend to be unforeseen during retirement, so you may want to be financially prepared to cover those hidden costs.

10. Inflation

Retirees are the most hit by inflation, which has been pushing up the price of everything from housing and gas to eggs in the past year. Nobody has seen these hidden costs coming, but it’s the reality we all have to live in.

Due to inflation, many seniors are currently reducing or eliminating certain costs altogether to ensure they have enough money for their basic needs. Moreover, some retirees have even taken part-time jobs to help make ends meet. That’s why it’s important to start planning for your retirement as soon as possible to build a nest egg and ensure you’ll have a way out of uncertainties like inflation.

You may also want to read Will You Retire In 2023? Here Are 6 Things You Need To Know!