Expenses like transportation and clothing may decline, but keep an eye out for new health care costs.
Many, if not most, retirees spend less than they did while they worked. Reports find that people in the pre-retirement phase of life (somewhere between 50-64) spend an average of $54,400 per year, while the annual expenses of those over 65 drops by around $12,500. While many expenses decline, there are some areas where retirees will actually spend more than when they were part of the working class. Know how your expenses are likely to change when you are in retirement.
Lower housing costs. Housing is a major expense for people of all ages. When you reach the age of retirement, you may have already paid off your mortgage, or downsize at retirement. This will have an impact on the overall cost of housing.
Fewer Transportation & Food Costs. Retirees have less of a need to buy ready-to-go foods, and perhaps don’t feel the need to buy highest priced name-brand food. They also give up their work commute, which can save them thousands of dollars each year.
Higher Health Care Costs. As you age, you will probably begin to require more medication than you did when you were a young whipper-snapper. The cost of healthcare tends to increase when you reach retirement. The prices tend to increase by over 28 percent, from $3,900 to $5,000. These costs are variable and depend on your health and the overall amount of medication that you require.
Reaching the age of retirement and no longer working is something that most people hope to reach. With smart planning, and the right health insurance coverage will increase your chances of stress-free golden years. To review your Medicare insurance options to make sure you are in the plan that best fits your needs, contact SeniorChoices NW in Wilsonville, Oregon.