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During our working years our cost of living was a reflection of our income, spending and saving. In retirement isn't it the same and different for all of us? The more we make the more we have to spend/save. If income goes down spending/saving goes down. Our goal is for our income to increase at a higher rate than our necessities and our hope is that our income increases more than our spending rate for wants. Perhaps this is why many prefer to delay and maximize their SS benefit as it gives them a better chance to stay ahead of their wants long term.
Thanks for all your responses. Looks like the average is about what I figured. Total living expenses didn't change much on average, but did shift from some category to others. What this helps is to confirm my theory: If you want to reduce living expenses, don't expect them to automatically go down with retirement. Specific changes will be needed in order to reduce expenses.
Thanks for all your responses. Looks like the average is about what I figured. Total living expenses didn't change much on average, but did shift from some category to others. What this helps is to confirm my theory: If you want to reduce living expenses, don't expect them to automatically go down with retirement. Specific changes will be needed in order to reduce expenses.
IIRC, you're moving back up north, far north. The cost of heating is really high, whether oil or gas. You many want to do some reasonable projections and/or get a very tight small home and/or alternative heating source (even cord wood for home heating is high, but less than oil or gas if it's a small home).
e 16). Suffice it to say that even if your memory is not faulty and you were paying less than a dollar for a gallon of milk, your experience was not typical of pretty much anywhere else in the country.
Great link.
I quote prices quite a lot. You tend to remember your "best prices ever" and the "worst prices you have ever paid" on nearly every item. Heck, last week, I received my local IGA ad and they had whole milk on sale for $0.99.
If only you could do that EVERY week .... (of course, my dairy farmer friends that I had dinner with last week would go broke ...)
Newenglandgrl: I'm already ahead of you on this one. Yes, I know heating will be higher. Been there, got the tshirt many times. But I think the move north will be about a wash. The city we've picked out has generally lower property taxes than most nice places in Texas. Plus we plan to buy an older home, which will be cheaper and that will keep the property taxes lower. So with the lower property taxes in Wis. and lower sales taxes, that will help balance off the higher heating bills. Plus we've picked a city that's closer to L. Michigan and so it doesn't get quite as cold. Being that close to the lake, we also are not likely to need much if any AC, and we'll save on that for sure compared to Texas. We hope our big savings will be on my wife's medications. She has a serious allergy problem, and we're hoping that it will be better in Wis.
But the move north is not just because of finances. Its back closer to all our family, including our new grandkids. It feels like home. Its hopefully better health, and we have never liked the hot summers in Texas. As long as we've been here, by the time August rolls around, I just can't take it anymore. I hardly go out unless its a dip in the pool or its got AC.
I think a lot of folks who are planning retirement are thinking that their cost of living might go down somewhat. Few new clothes etc, needed for work, as well as no longer traveling to work and wearing out your vehicles and spending money on gas and maint. to keep the car running. Some maybe get a smaller house if they move or they move to a city with a lower cost of living. My question is for those who have retired, how has retirement changed your cost of living.
My guess is that it might not change at all. Yes you might save money on the mentioned items I listed, but with more free time, folks might be spending more money playing golf or traveling. So how's your budget?
It's definitely gone down for us. Not for food and other necessary items where costs have gone up for everyone, but we spend a lot less in gas and other automotive costs because we don't use the cars for work anymore, less in costs related to work ( such as clothing, dry cleaning, lunches out, that type of thing). Our biggest savings, though, comes from having built our retirement house in an area where the cost of living is less ( we happen to love the area too), funding this building with an equity line of credit on our old house ( we had paid off that mortgage in 2000 so could get a large equity loan), paying off that loan when we sold that house. As a result we now live in a new house with no mortgage, our utility costs have been relatively low ( only electric and cable-internet-phone costs).
Couple that with decent pensions and social security, decent investments, life is great......
Food up
Utilities up
Water and sewer up
Excise tax (cars) up
Registration and inspections (cars) up
Property tax way up
Eating out up
Insurance (Medicare/advantage) down
Clothing down
Personal care and items the same
Did I say property taxes way up (the rate itself and thus the bill). Anyone on a modest budget does not want to live here, or worse, toward Boston or in NY state or in NH.
Does your state/municipality have any kind of senior citizen discounts for those property taxes?
Bite your tongue. Not an attorney but had to dress to the nines every working day but "No-tie-Friday" because I was either scheduled to testify before a policy or fiscal committee of the Legislature or could be called-in to do so at a moment's notice. Other possibilities were a "summons" to the Governor's Office or having to take part in a bill-writing session with legislative staff, attend meetings with other agencies or constituent groups, federal offices, testify in court, etc.
Many wore jeans and casual shirts on Fridays. Dressed-down for my office meant slacks, dress shirts sans ties but having a sports coat and tie in the office if needed.
One expense (I agree with that vs. COL) that did increase in retirement was transportation. My wife (same field as mine) and I lived within an easy walking distance of our offices and the State Capitol so we had no commuting costs. Here we live rurally some 18-24 miles from anywhere and 60 miles from the closest real city - over 10k - so we put a lot more miles on our car. Most other expenses have stayed fairly level or gone down, as did our income.
LOL, DH and I were always cheapskates when it came to clothing- not that we ever had jobs where we were required to wear three-piece suits or dress to the nines, but there were dress codes we had to comply with. We used to do our clothes shopping at discount stores, outlets, and sales at department stores, and that worked for us. But now that we're retired- even with the contract work I do at home as an educational consultant when the spirit moves me- cutoffs, shorts, capris, jeans, T-shirts, sneakers or flipflops are the dress code now. I guess those are cheaper than work clothes, and they don't always have to be in great shape if you're just wearing them around the house.
Toilet paper - you will use a lot more toilet paper when you are retired so become accustomed to buying more.
This made me LOL. Then I realized, it's probably actually true!
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