If you are a regular reader of this column, chances are you are eagerly anticipating retirement. After all, the point about learning about saving and investing is to have the retirement you want.

So, what will your “closing ceremonies” look like? It’s easy to imagine spending more time with your kids, moving somewhere warm or travelling, but there are some less pleasant realities you would do well to plan for. To cite just one example, we are continually surprised by how many people close to retirement are unaware Social Security is taxable.

In the interest of giving an honest assessment, here are some things to expect that you might not be expecting.

The impact of inflation

We have enjoyed a sustained period of economic growth accompanied by extremely low inflation. Unfortunately, it is beginning to rear its ugly head once again.

What does that mean for you? Even at a rate of 3%, the value of your money will decrease by 50% over 25 years. It is important that your investments are not so conservative that you wind up lagging behind the inflation rate. Work with your advisor to adjust your portfolio to accommodate the possibility of inflation, but don’t panic. If you are closer to retirement, find ways to balance returns and risk.

If you will be retiring very soon, consider lifestyle changes to account for inflation. If you were planning on renting, consider holding onto your property or buying a house to live in.

No job doesn’t mean no income taxes

In addition to Social Security taxes, you will still be responsible for income tax. This is especially true if the majority of your retirement money is held in tax-deferred accounts like a 401k or IRA. Of course, since you’ve stopped working, your lower income may put you in a lower tax bracket. This is especially true in the earliest years of retirement if you are not claiming Social Security.

If you are further out from retirement, work with your advisor to formulate a tax-efficient plan for retirement income, including when you should withdraw and from which accounts. Understand the impact required minimum distributions (RMDs) will have on your tax situation. Begin to think of your income across the entire year rather than as a set of paychecks and monthly expenses.

You will likely spend more once you retire

This is among the biggest surprises retirees face, but it makes sense if you think about it. New retirees take advantage of their newfound freedom. They travel, they dine out, they buy boats. As a result, the cost of living tends to increase those first few years.

This works out great so long as you are prepared for it. Factor it into your retirement savings plan and budget for it when the time comes.

Retirement is your reward for decades of hard work. Knowing what to expect, good and bad, from your closing ceremonies will help you realize the retirement you have been envisioning.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This article was originally published in the Pioneer Press. You may view the article here.