As you near the end of your career, it’s important to assess your finances to see if you’re ready to retire. And a big part of that means setting a retirement budget.

Once you’ve mapped out your monthly or yearly expenses, you can see if you’ll have enough income based on the amount of money you’ve saved in a retirement plan while accounting for the benefits Social Security will pay you.

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If the numbers don’t seem to work, you can work a bit longer to add to your retirement savings. Doing so might also make it possible to delay Social Security past full retirement age for larger monthly benefits.

But if the numbers do work, you may feel confident bringing your career to a close as planned.

One thing you don’t want to do, though, is underestimate key retirement costs. Here are four you risk misjudging.

1. Healthcare

You’re probably aware that healthcare is a substantial expense for typical retirees. But did you know that it might cost you $172,500 throughout retirement? That’s the latest estimate from Fidelity for a 65-year-old retiring this year.

It’s important to read up on Medicare and the costs that could come with it so you know how to budget accordingly. And do keep in mind that Fidelity’s number does not include long-term care, which could be a significant expense in its own right.

2. Housing

If your home is paid off going into retirement, you might assume you won’t have to spend that much on housing once you stop working. But even if you don’t have a mortgage payment to make, there are other costs you might incur, including:

• Property taxes
• Homeowners insurance
• Maintenance and repairs

Also, the more time you spend at home, the higher your utility bills might be. You may or may not count those as part of your housing costs. But it’s important to recognize how much of your retirement income they might eat up.

3. Leisure spending

Once you stop working, you’re going to need a way to keep busy. And so you might end up spending more on leisure than expected.

Remember, even small expenses could add up. If you sign up for an extra streaming service that costs $20 a month and join a gardening club whose monthly dues are $30, that’s an extra $600 per year.

And if you’re counting on small trips to keep busy with, as opposed to luxury vacations, remember that even if you’re driving to your destinations and spending minimally on lodging, having to buy meals at restaurants and cafes can get expensive quickly.

This isn’t to say that you should skimp on leisure in retirement, since it’s important to be able to enjoy your time. The key is to be realistic about what it will cost to occupy yourself.

4. Taxes

You may be surprised at what your tax bill looks like in retirement, even if you’re not earning so much as a dime from a paying job.

For one thing, unless you have your retirement savings in a Roth account, withdrawals from your IRA or 401(k) will be taxable. And if you earn money from investments in a taxable brokerage account, like dividend stocks, the IRS will be entitled to a piece of that income, too.

If you’re worried about taxes in retirement and don’t have any money in a Roth IRA or 401(k), you may want to consider a Roth conversion. Otherwise, work with a tax professional to figure out how to factor taxes into your finances.

The last thing you want is to retire and find yourself overwhelmed by financial stress. Do your best to estimate your costs accurately so you’re able to enjoy retirement without constant worry. And if you’re not confident you’ve saved enough, it could pay to delay retirement by a year or two if it buys you more long-term financial security.

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