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The Five Biggest Stealth Costs in Retirement for Performance Food Group Employees

Healthcare Provider Update: Healthcare Provider for Performance Food Group Performance Food Group (PFG) collaborates with Vizient, Inc., a leading healthcare performance improvement company, to enhance its healthcare solutions for its employees. Vizient serves a significant portion of acute care providers and assists healthcare organizations in achieving cost-effective care and operational excellence. Potential Healthcare Cost Increases in 2026 As the healthcare landscape evolves, significant increases in costs are anticipated for 2026, particularly for consumers utilizing Affordable Care Act (ACA) plans. With potential hikes in premiums exceeding 60% in some states, the expiration of enhanced federal subsidies could leave over 22 million marketplace enrollees facing out-of-pocket premium increases of more than 75%. This scenario, compounded by rising medical costs and substantial profit margins reported by major insurers, signals a challenging economic environment for healthcare consumers in the upcoming year. Addressing these anticipated changes early will be critical for both individuals and businesses to mitigate potential financial burdens. Click here to learn more

'Performance Food Group employees must remain vigilant about hidden costs in retirement, as unexpected expenses like health care, taxes, and inflation can have a real impact on their long-term financial well-being. Proactive planning and budgeting for these stealth expenses can provide much-needed peace of mind as they enter retirement.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'Performance Food Group retirees often underestimate the impact of inflation and unexpected medical costs on their retirement savings. By planning for these stealth expenses and adjusting their budgets accordingly, they may avoid unnecessary financial strain and maintain a comfortable lifestyle throughout retirement.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

The five most common stealth expenses in retirement, including health care, taxes, emergencies, family-related expenses, and inflation.
The impact of inflation and unexpected costs on Performance Food Group retirees.
Strategies to reduce the burden of stealth expenses through proactive planning and saving.

Many Performance Food Group employees concentrate on budgeting and income management while making retirement plans. While this is crucial, planning for hidden or stealth costs—unexpected expenses that can occur and negatively impact finances—is often overlooked. Even with a well-thought-out budget, retirees may find themselves caught off guard by these expenses, leading to unnecessary stress.

Unexpected expenses are a significant factor in 43% of retirees feeling more financially worried than before retirement, according to a recent study by TheSeniorList.com. ¹ Many Performance Food Group retirees realize that they are unprepared for the hidden costs that emerge once they leave employment, despite saving substantial amounts for retirement. While $1.26 million is considered an ideal amount to retire comfortably, ² many Performance Food Group employees haven’t reached this target, making them vulnerable to unanticipated costs that could derail their financial plans.

“Performance Food Group retirees and pre-retirees recognize the imperative to plan for unforeseen financial events, but they often struggle to put aside sufficient funds to do so,” says Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement. The current high rate of inflation is making it more challenging for investments and savings to keep up with rising prices, exacerbating the issue. Notably, 20% of retirees and 35% of pre-retirees say they experienced a financial shock that caused them to lose more than 25% of their assets, according to the Retirement Risk Survey conducted by the Society of Actuaries (SOA) Research Institute. ³ This underscores the importance of addressing hidden expenses in retirement.

To help prevent financial strain, Performance Food Group retirees should prepare for and anticipate the five most common stealth expenses listed below.

Health Care Expenses

Performance Food Group retirees are often surprised by the full cost of health care, despite it being a known expense. Unexpected medical expenses, especially for serious or chronic conditions, can become a significant financial burden. 'Putting numbers around the potential cost of unexpected medical crisis is notoriously challenging, and even chronic health issues are hard to estimate, especially if they last longer than expected,' says Patrick Ray, a financial advisor at The Retirement Group, a division of Wealth Enhancement. The price of medical care might vary greatly. A hospital stay of two nights could cost about $20,000, but a longer stay or a serious illness could easily exceed $100,000. ⁴

Even for those with insurance, medical bills are a common source of hidden costs. Performance Food Group retirees may need to cover a significant portion of medical expenses due to escalating insurance premiums, co-pays, and deductibles. By confirming they have adequate insurance coverage, including supplemental insurance for unforeseen medical costs, retirees can manage these expenses more effectively. Home insurance can also provide additional financial support for unexpected costs, such as an injury on the property.

Taxes

Taxes do not disappear in retirement, despite what many retirees may assume. Many Performance Food Group retirees believe they won’t need to pay taxes once they stop working. However, this is rarely the case, especially for those with multiple income sources. 'Although many retirees no longer earn a salary, they still receive income from an array of sources, such as employer-sponsored plans, savings and investments, and Social Security,' says Kevin Won, a financial advisor with The Retirement Group.

Depending on its source, retirement income may be taxed differently. For example, distributions from retirement accounts like IRAs and 401ks are taxable, and Social Security benefits may be taxed if a retiree's income surpasses certain thresholds. Taxes on investment income can complicate retirement planning. Performance Food Group retirees can save on taxes by using strategic asset placement and planning.

Emergencies

Emergencies are an inevitable aspect of life, and their unpredictability makes them especially challenging to prepare for. These emergencies can include anything from car repairs and home maintenance to unanticipated legal or family medical expenses. Neva Bradley, a financial advisor at The Retirement Group, emphasizes the importance of putting money aside for these situations. On a fixed income, she explains, 'retirees who don't put funds aside for emergencies risk facing unexpected expenses that could reduce their monthly income, making it harder to cover necessary costs.'

Performance Food Group retirees can manage these unexpected costs by maintaining a separate emergency savings fund. It is important to set aside a percentage of funds specifically for emergencies, so retirees can cover expenses without having to dip into their primary retirement savings or return to work.

Family Emergencies

Financial emergencies involving family members can also be a significant hidden expense in retirement. Many retirees, including those at Performance Food Group, want to help their adult children or grandchildren during difficult times. Helping adult children in a crisis or contributing to grandchildren’s college tuition could cost up to $20,000 per year or more for tuition alone.

Major family events, such as the death of a spouse, can also create high expenses. For instance, typical funerals cost between $7,000 and $12,000, ⁵ and there may also be legal fees to settle the estate, which can range from $5,000 to $10,000 or more. ⁶ Financial advisor Kevin Won stresses the importance of planning for these expenses. “Retirees who want to help family members through tough times should think through how they plan to cover those costs,” he says.

Costs Associated with Inflation

Inflation is one of the most common and unpredictable expenses in retirement. Many Performance Food Group retirees aren’t prepared for their purchasing power to slowly decrease. Inflation can significantly erode the value of retirement funds, making it harder to maintain your desired lifestyle. 'Inflation isn't something you can control, but it is something you can plan for,' says Kevin Won. This begins by understanding how inflation could erode your purchasing power over time. For instance, investments of $50,000 annually today would notionally need to grow to $90,000 in 20 years to maintain the same purchasing power.

Inflation impacts every aspect of life, from housing and health care to food and transportation. Inflation and the cost of living were cited by 28% of retirees as the most unexpected aspect of their retirement planning, slightly surpassing the 27% who mentioned medical and health care costs, according to the SeniorList survey. Performance Food Group retirees living in older homes or regions susceptible to natural disasters may also face additional costs for repairs or insurance.

Three Strategies to Reduce Retirement Stealth Expenses

Fortunately, Performance Food Group retirees can take steps to prepare for and reduce the burden of these hidden costs.

Create a 'Stealth' Annual Budget

One practical approach is to create an annual budget specifically for stealth expenses. By planning in advance, Performance Food Group retirees can minimize the stress of dealing with unforeseen bills, which many mistakenly treat as emergencies. Neva Bradley advises, 'Budget for these expenses annually.' Regular retirement budgeting should include costs such as car updates or appliance replacements.

Delay Retirement

Delaying retirement by even a few months or years can help enhance a retiree's financial situation. Continuing to work allows retirees to save more, avoid early withdrawals from retirement accounts, and let investments grow. Neva Bradley recommends that Performance Food Group retirees 'push back retirement for as long as practical' to strengthen their financial position.

Put the Money Away Early

One of the most effective ways to prepare for unforeseen expenses is to start saving for retirement as early as possible. Paul Bergeron from The Retirement Group suggests using health savings accounts (HSAs) to save for future medical costs. 'Health care costs are on the rise and often exceed what retirees anticipate. An HSA can help,' he notes. Even without an HSA, Performance Food Group retirees should prioritize saving for medical expenses to cover co-pays, co-insurance, and uncovered health care costs that can quickly add up.

In Conclusion

Hidden costs, such as health care, taxes, emergencies, family-related expenses, and inflation, can significantly affect Performance Food Group retirees’ financial well-being. While these expenses are often unforeseen, retirees can take proactive steps to plan for them. By budgeting for unexpected costs annually, delaying retirement, and saving strategically, Performance Food Group retirees can alleviate the financial strain brought on by stealth expenses and craft a comfortable retirement.

The soaring expense of long-term care, often not fully covered by health insurance, is a major concern for retirees. Those who are currently 65 have almost a 70% chance of needing some type of long-term care services in the future. ⁷ Planning ahead for these costs, whether through insurance or savings, is crucial for safeguarding retirement income.