Mostly, it’s the financial decisions you make that determine if you’ll enjoy or endure your retirement. So, if you are about to kiss goodbye to your working days or have already begun this new phase of your life, you’re on the right page.
Source: Quora
Here, we’ll show you the top ten expenses that can stop you from a pleasurable retirement and how you can protect yourself.
Spending Habits Are Your Greatest Enemy
Retirement is a period to be prudent and financially savvy, and if there’s any time you should watch your spending, it’s now.
Source: Quora
Therefore, it’s wise to take some time to reassess your finances, be honest about how much you need to adjust your spending habits, and outline strategies to surmount those hurdles. But first, you must identify those expenses likely to bore a hole in your pockets. Let’s dig in.
Housing
Housing costs take up a large chunk of retiree expenses. Data reveals that an average retiree spends over $17,000 on yearly housing costs. Retirement could meet you still paying off your mortgage or battling with home maintenance costs.
Source: Quora
To free yourself from this burden, consider moving to a less expensive home or relocating to an area with a lower cost of living.
Transportation and Travel
Although you might not be moving around as before, statistics reveal that transportation costs account for 12% of retiree expenses. That’s a whole lot. Fortunately, you can bring down this cost by switching to more economical transport means.
Source: Quora
For example, you could schedule those trips for off-peak periods. Plus, there are several public transportation discounts for seniors you could take advantage of.
Healthcare
Healthcare ranks third on the list of retiree expenses. According to statistics, retiree households cough out over $6,000 every year on medical services, health insurance, medical supplies, and drugs.
Source: Quora
To reduce healthcare spending, start by making sure you’re getting the best deals from your health insurance. Speak to a health insurance expert to better understand your coverage options and know if there are any benefits you aren’t taking advantage of.
Charity
We tend to get more selfless as we grow older, especially during retirement. After all, doing good is good for the soul. Regardless, you don’t want to give to your detriment, so it’s wise to moderate your giving too.
Source: Quora
You might want to take a break from charitable spending for a while after retirement so you can resume when you’ve found solid ground in your finances.
Taxes
There is a general notion that taxes decline sharply after retirement. As refreshing as that may sound, that’s not always the case. In fact, many retirees still find their finances gasping for breath under the weight of several taxes.
Source: Quora
The key is to plan for taxes, preferably before retirement. Consequently, it is advisable to keep your retirement funds in IRAs, Roth IRAs, and brokerages. These facilities will boost the efficiency of your tax payments.
Emergencies
Of course, emergencies are a fact of life. There will be pressing home repairs, appliance repairs, and distressing and pressing situations. But if not properly handled or prepared for, they could leave a dent in your retirement savings.
Source: Quora
To survive through emergencies, it’s advisable to set aside an emergency fund in a high-yield account, if possible. This way, life won’t be able to barge into your retirement plans without notice.
Food
Many retirees have had a horrible retirement because they overspent on food. While feeding is a basic requirement for life, there are ways to have quality meals on our dinner tables without harming your finances.
Source: Quora
First, reduce the frequency of dining out as much as possible. Also, consider money-saving tips such as sticking to your grocery list, buying at senior citizen’s discount stores, and utilizing coupons.
Utilities
If your utility bills are off the roof, they will leave a dent in your retirement savings. But there are ways to put those phone, gas, electricity, water, and internet bills in check.
Source: Quora
For example, you can opt for more energy-efficient LED lights and install a programmable thermostat. Other strategies include turning down your water heater from the preset 140 degrees and overcoming the urge to purchase the highest available internet speeds.
Entertainment and Leisure
If you’ve spent a significant part of your life working hard, just as many retirees have done, you deserve all the rest in the world. This includes entertainment such as live music, swimming classes, and signing up with golf clubs.
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But it’s wise to be on the lookout for entertaining activities that won’t threaten your savings. So, consider gardening clubs, book clubs, and art classes.
Spending on Your Grandkids
There’s no scale to measure the love of a grandparent for their grandkids. Accordingly, you would naturally want to respond to their needs whether it’s sponsoring their summer trips or contributing to their college savings plan.
Source: Quora
But don’t over-stretch your funds. If you can, have a separate savings account for your grandkids. Also, remember that you don’t have to splash the cash to show that you care. Less expensive but thoughtful gifts will do the job.
