Finance Tips

What to Spend Less on in Retirement

Although I’m scared about running out of cash in retirement, I’m certain there are some things that I’ll spend less on as I enjoy my quiet life. After a thorough review of my daily needs and expenses thereof, I have concluded that I might spend less on the following items during retirement.

1.Insurance

There’s a likelihood that my expenditure on insurance, save for health coverage, will drop drastically when I attain retirement age. On average, an under-65 household has an annual insurance expenditure of about $8,100. This covers life insurance, personal insurance plans like homeowners insurance, and annuities.

As I pay for my life insurance cover, I know too well that I’m doing it because I have a family to support. However, when the children grow and cease being financially dependent on me, I might terminate the policy, and decide to check out different providers who offer Final Expense Life Insurance plans instead. Knowing that any medical bills or funeral expenses you have to pay can be taken care of once you have died sounds like such a good idea, especially if it means pressure can be taken off your family. For these reasons, I may definitely consider getting this should I decide to end my life insurance coverage. Besides, some insurance firms are likely to offer me discounts on homeowners and auto insurance. Still, I might be entitled to a discount on car insurance as long as I complete a defensive driving course, which is something that won’t do me much harm because it never hurts to have a refresher course every now and then. According to my friend, other discounts can come in the form of car insurance for hgv drivers, or mature drivers, as she says that certain companies offer competitive policies based on your driving history (something that I have a lot of), so this could be something worth considering too, especially if I want to save more money. The fact that I will be at home more often; there will be reduced risks of fire and break-ins, thus putting me in a good position to get discounts on homeowners insurance.

2.Mortgage

Data from the Bureau of Labor Statistics show that I would have cleared my mortgage by the time I hit an age range of 65-74, then live a mortgage-free life. However, I know that these housing costs won’t disappear in their entirety when I retire. Even if I’m free from mortgage, I’ll still have to incur other costs on relocating to senior living facilities, downsizing, paying utilities, property taxes, and general home maintenance such as plumbing or repairing your HVAC systems. These need to be checked every now and then so that you don’t end up spending a huge amount replacing the whole thing. For plumbing-related services, you could contact sites like https://thecomfortdoctors.com/plumbing-services-in-hawley/ or other similar ones.

Most of us will do anything if it means we don’t have to pay so much, so downsizing could be the perfect route to take if needs be. Making the step to downsize to a smaller property, like to these tiny homes (https://www.tinyheirloom.com/used-tiny-homes-for-sale/), for example, any living costs that I would be required to pay will be greatly reduced due to the fact that my surroundings won’t be as grand as what they may have been beforehand.

3.Alcohol and tobacco products

An article in the New York Times says that with retirement comes less stress among the majority of Americans. Therefore, when I retire, I’ll reduce or quit smoking and drinking, take up a training and exercise schedule, and be less obese. According to the Journal of Human Resources, I will be less prone to serious illnesses after a few years into my retirement. Remaining active means less loneliness, and with a busy schedule, I will smoke, drink and binge less.

4.Entertainment

As a 75-year old in retirement, the urge to venture out and explore entertainment joints will sharply diminish. So, my visits to movies, and concerts will reduce as I won’t have the vigor to attend them. Indeed, the decline in mobility is directly proportional to old age. Currently, with the COVID-19 pandemic, if I were old, then I would be nervous venturing out as old age poses vulnerability to attack by COVID-19. I could also just want to relax indoors after years of slogging to the office.

5.Groceries

In retirement, I’ll have enough time to spend at the grocery store comparing prices of similar goods, or my coupons, or prepare a schedule for my menu for the week ahead. This routine will undoubtedly cut my expenditure as I’ll be buying cheaper groceries. Still, in retirement, I won’t patronize fast-food outlets as is the case currently. By avoiding quick lunches or costly lattes, I will save significantly on groceries.

6.Taxes

Most states are sensitive to the needs of retiring citizens, and as such, waive or lower property taxes for retirees aged 65 on retirement income, particularly on retirement-saving plans, Social Security, and pensions.

7.Transportation

In most parts of the world, working remotely from a computer is the norm due to the COVID-19 restrictions. That is the likely scenario that awaits me in my retirement. I will use my vehicles far less for transportation. The sheer thought of getting stuck in traffic scares me.

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