…Did you know that there are certain things you’ll spend less money on in your retirement?
We’re sure you were often told that you need to save quite a lot of money so that you can have a happy and carefree retirement. Many people say that you’ll need roughly 80% of your pre-retirement income so that you can be sure that you won’t run out of money.
That’s the reason why many people decide to stay at their jobs even after they get past the age of 65, which is the usual retirement age – to make sure that they have plenty of money to live on.
However, speaking of expenses, you should know that there are some things that are actually cheaper now that you’re a retiree. So even though there might be things that cost more, such as traveling, health care, or utilities, you’ll be surprised to discover that there are also things that will help you make some income.
With that being said, here are 7 useful retirement things you’ll spend less on.
1. Clothing
If you used to work in an office, you surely used to dress up for your working hours so that you could look sharp and feel more productive. But now that you’ve said goodbye to the workforce, your wallet gets a break from all the shirts, pants, and high heels shopping.
According to some data, before the pandemic hit, the average retired household spent approximately $1,000 on clothing and accessories, compared to the average working household, which spent more than $1,800 on apparel a year.
However, even though retirees usually spend less money on things such as clothing and accessories, some experts say that people tend to spend more money on apparel in the first years of retirement. Keep in mind that you don’t need as many casual clothing items as you think. Like how many golf pants do you actually need to wear?
2. Food
Even if you dream about eating a steak dinner every day or going on brunch dates with your significant other, chances are that your food bill will be lower compared to the preretirement ones.
The simple explanation for this thing is that retirees are usually more price-conscious when they go food shopping. When you’re not in a rush to buy all the items that you want and then quickly head home, you have more time to compare the prices on similar products, use the coupons you have, and give a second thought to what you plan on eating the week ahead.
And this is really important to keep in mind, especially since inflation has become a real problem in our lives and food prices in both supermarkets and restaurants have made a big spike.
Moreover, experts say that retirees also spend less on dining out. That’s because when you’re working, a big part of your eating habits might be ordering lunch at work or buying lattes on your way to the office. But when you have more free time, you have the chance to cook at home or to choose a table-service restaurant and know how to use the discounts.
3. Education
If you want to improve your brain and keep learning things even when you’re a retiree, you should know that plenty of colleges offer free or low-cost courses for people in retirement.
Many experts recommend for retirees to pick up a course, especially since they cost almost nothing, so that they can keep their brains working and their minds sharp. Top universities such as Yale and Harvard offer free courses, given the fact that they believe learning should be available for everyone, regardless of age or social status.
…Would you like to go back to school as a retiree?
4. Taxes
Many states want to help their retired citizens moneywise, so they’ve decided to lower or even abandon some of the property taxes for those who are over the age of 65. They also exempt a percentage of retirement income—particularly from pensions, Social Security, and retirement-savings plans from state income taxes.
These prospects come in several forms, such as tax credits, rate freezes, exemptions, and deferrals. If you’re curious to know more about this, you should look for a guide on how to claim them in your state.
In conformity with some data, households in which the adults are between 55 to 64 years old usually spend $2,500 on property taxes a year. The number decreases to roughly $2,100-2,100 for households in which the adults are at least 65 years old, and it goes to $1,900 in households where adults are 75 and older.
5. Insurance
The amount of money you’ll pay for insurance (this doesn’t include health coverage), drastically drops once you hit the retirement age. Households of people who are under the age of 65, for instance, usually pay $8,100 a year on insurance, which includes life insurance, annuities, and other personal insurance plans, like homeowners insurance. When you’re a retiree, the number quickly drops to approximately $2,800.
The majority of people choose to pay for life insurance while they have a family to support and usually withdraw once their children are able to financially support themselves. If you want to save some extra cash, you should know that there are states that offer seniors discounts on car insurance if they participate and complete a defensive driving class, such as those that are offered by AAA or the AARP.
According to the Insurance Information Institute, retirees are more eligible for receiving discounts on homeowners insurance, given the fact that they’re home more often, which can significantly reduce the risk of fire and burglary.
Learning important topics related to insurance is not that easy; unless you’re already a financial expert or you’ve worked in the field. But the rest of us acknowledge the fact that we might need a little help, and this book is simply the best way to learn more about insurance. Written by Christopher J. Boggs, “Property and Casualty Insurance Concepts Simplified: The Ultimate “How to” Insurance Guide for Agents, Brokers, Underwriters, and Adjusters” will simply (as the title indicates) all these foreign concepts you might want to know more of.
6. Transportation
If you’re still working but your workplace is just around the corner from your home, or if you’re working remotely, you’ve already noticed that you don’t spend a lot of money on transportation anymore. The same rule applies in retirement as well, because you won’t use your car a lot. Another great thing about this is that you’ll successfully avoid all the rush-hour traffic.
This way, you’ll spend less money on gas and you won’t have to pay as much money on insurance, car maintenance, and registration or subway, bus, or rail fare if you use public transportation.
Several studies have discovered that before the pandemic, the average working household spent more than $9,000 every year on transportation, and that number dropped to roughly $6,000-7,000 for the average retired household.
7. Alcohol and Tobacco
Even though you might think that retirees are more likely to drink and smoke due to the fact that they have a lot of free time to socialize, it’s actually the other way around. Seniors don’t work anymore, which means that they are no longer as stressed and anxious as they used to be and they are more likely to make healthier choices overall.
That includes quitting unhealthy habits such as smoking and drinking and adopting things they might benefit from in the long run, such as having a clean and simple diet and picking up an exercise routine.
Of course, there are retirees who couldn’t let go of their not-so-good habits, but they are fewer compared to the people who don’t engage in any of these two activities. According to research, the average working household spends approximately $400 a year on tobacco products, while the average retired household spends half of the money previously mentioned.
…If you find this article helpful, we recommend you to check this one out as well: Big Retirement Fears? 5 Things You Probably Didn’t Consider Enough!
