Likely to spend less on these in Retirement

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A popular rule of thumb suggests that retirees need 80% of their preretirement income to make ends meet, and some experts encourage saving even more to avoid running out of money. Consumer spending decreases significantly as you age. In order to know how much you need to save for retirement, it’s important to know what your spending will look like once you actually retire. The author in the article below highlights examples of such expenses. Team RetyrSmart

Likely to spend less on these in Retirement


Life has turned upside down during the pandemic, with many of us working from our computers.

If you’re still working remotely, that’s pretty much what your transportation life will look like in retirement: You’ll be using your vehicles far less — my household went down to one car during the mandatory stay-at-home period, and we’ve remained so.

Not only will you be spending less on gas, you’ll also be saving money on vehicle maintenance (and bus and rail fare). Before retirement (and the pandemic), the average working household (US example) spent $9,761 each year on transportation. That number drops to $6,814 for the average retired household, a 30.2% decrease in household spending, according to the most recent data from the Bureau of Labour Statistics.

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Before we were all in the pants-optional world of working from home, it’s likely you spent what you needed to look good at your job. In retirement, no more pressed shirts or high heels, and your wallet gets a break from updating your work wardrobe. The average retired household spends $1,070 a year on apparel, while the average working household spends $1,866 a year. Also, factor in the money you’ll save on dry cleaning (averaging as much as $1,000 a year in some metropolitan locations).

A caution though: Although household spending on apparel decreases overall in retirement, spikes in spending are seen from recently retired clients who feel the need to update casual wardrobes in the first few years of retirement.


Even if you dream of a retirement filled with steak dinners and brunch dates, chances are you’ll still spend less on the food you consume in and out of your house. The average household spends 25% less on food in retirement. The logic to this is simply that you have more time to shop. When you’re not in a hurry at the grocery store, you’re more likely to compare prices on similar products, use coupons and spend more time planning meals for the week ahead.

Spending on dining out drops even more sharply — as much as 35%. When you’re working, much of your dining out may be quick lunch runs or costly lattes on the way to work. Instead of patronizing fast-food restaurants more frequently, retirees reserve their eating-out dollars for table-service restaurants.


Plenty of time for plenty of fun, am I right? No. There’s a common misconception that you’ll spend more dough-re-me in retirement on entertainment — concerts, movies, clogging, you name it — because you have more time. But the numbers don’t back this up. And who knows when entertainment venues will reopen to large crowds, if ever, post-pandemic?

This decline likely corresponds with changes in mobility as you age. You may also be nervous about being in crowds as COVID-19 still rages. Or you just want to chill after years of slogging to the office. Even if you occasionally splurge to see your favourite college band, you may find yourself opting to watch Netflix instead of going out every weekend. But be careful. Streaming services are popping up everywhere, and their layered charges for more and better options can jack up your entertainment bill.


Hopefully, you’ve timed this right: According to the Bureau of Labour Statistics, 61.7% of Americans between the ages of 65 and 74 don’t have mortgage debt, and 82.5% of Americans 75 and older are mortgage-free.

To be sure, housing costs don’t disappear entirely in retirement. Even if you’ve paid off the mortgage, you’ll still spend on home maintenance, property taxes, utilities, and you’ll incur moving costs associated with downsizing, relocating or moving into senior-living facilities. 

Insurance (non Health)

Most people pay for life insurance while they have a family to support and may opt out once their children are no longer financially dependent. At the same time, retirees may be eligible for discounts on auto and homeowner’s insurance. Most states offer older adults discounts on car insurance if they complete a defensive driving class, such as one offered

Alcohol and Tobacco Products 

The New York Times reports that in retirement many Americans find they are less stressed—and therefore smoke and drink less, are less obese, and may be more inclined to exercise. A study by the Journal of Human Resources found that after a few years of retirement, adults are less at risk for serious illnesses, less likely to report loneliness, and may have an increased sense of purpose and camaraderie that lowers their likelihood to binge eat, drink and smoke.

Pets and Pet Supplies

It’s often reported that having a pet in retirement can benefit your health in big ways. A four-legged friend can provide companionship for lonely retirees and encourage regular exercise. However, the promised perks don’t have to translate into massive spending.  The Bureau of Labour Statistics says that having children, particularly older children at home, increases household spending on pets. 


In an effort to ease the financial burden on retirees, many states waive or lower property taxes for those older than 65 and exempt a portion of retirement income—particularly from pensions, Social Security and retirement-savings plans—from state income taxes.

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