Most people expect to spend less money after they retire. But that might not be the case (pension, vacations)
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I don't spend more money, for me, it's rent, utilities, food, some insurance and I have NO NEED to buy the years of clothes, purses, shoes etc etc etc I indulged in for decades before retirement. I try to get rid of something just about every day. I'm not into luxury stuff even vacations anymore. I live in a vacationland.
Timing is everything! -- I can remember considering living and retirement costs about 10-15-years before the fact ... without thinking too much about inflation and rising taxes and interest rates. Had I trusted my assumptions at that time, we would have been woefully short on retirement funds.
Finally, when we got to retirement (2008), I looked closer at income sources and investment expectations. The financial markets had already been in the tank for a while - where they remained for several years. Fortunately, we had the option of a reasonably high, fixed income (pension, SS, etc) - and did not have to withdraw living expenses from IRA/401K/403B resources. Without that, we would have seriously depleted our principle (and future income expectations), because of sub-par returns over the next several years.
We also recognized that interest rates and taxes were historically low, while future inflation rates and healthcare costs were likely to be much higher. Also, given expected life-spans, long-term care costs 'could' eat-up our nest egg. Now, 9-years into retirement, I still track and adjust our financial expectations on an annual basis -- and have made provisions for ever-increasing inflation costs.
In summary, the determination of whether one's future retirement cost expectations are in line with one's 'then-year' income and costs - is a moving target. Instead of simply considering current costs and near-term retirement expectations, one must to think at least 10-15+ years downstream. In this respect, the old axiom holds true: "Plan for the worst and hope for the best"
We can find an article that says whatever we want to hear or believe. As for us and all our friends we spend a lot less in retirement. The exception is probably medical of course. But our utilities are lower, we do not eat out as much, we down sized like most people do, thus our house payment if almost non existent and we don't have the need for nice cloths like we did while working plus in our case we went back to one car. We do not entertain like we used to, not as often or as elegantly. I don't see where anyone can claim they spend more since retiring unless they choose to take one trip on top of another.
We can find an article that says whatever we want to hear or believe. As for us and all our friends we spend a lot less in retirement. The exception is probably medical of course. But our utilities are lower, we do not eat out as much, we down sized like most people do, thus our house payment if almost non existent and we don't have the need for nice cloths like we did while working plus in our case we went back to one car. We do not entertain like we used to, not as often or as elegantly. I don't see where anyone can claim they spend more since retiring unless they choose to take one trip on top of another.
On all items excluding MEDICAL, we spend a LOT less. We pay much less for housing, property tax, food, vehicles, gym memberships, HOA fees, and other expenses.
However, much of that is offset by the fact that we are paying 100% of our medical costs in retirement as opposed to 30% when we were working.
We are paying less for necessities- because we are in a lower cost of living area. We are even paying less for our healthcare, keeping our fingers crossed that this continues. We are doing a lot more discretionary spending. Going out a lot- taking our kids on vacation. Enjoying life-no longer in the saving mode.
I'll be through with my mortgage by the time I retire but I'll completely use that and probably half of what I'm now saving for retirement on travel. I'm sure the other bit will go for health insurance and medical. No reason for my utilities or food to go down much...I buy many of my clothes "vintage" now.
But I hope to have more time for hobbies, some of which will be techie/electronic in nature so that'll cost. I certainly won't be giving up my gym membership...Nope, I don't think I'll be spending much less.
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