Posted on 03/19/2024 5:00:06 AM PDT by where's_the_Outrage?
The average American 65 years of age and up earns an annual pre-tax income of $55,335, and that same group spends $52,141 yearly, or $4,345 a month, according to the Bureau of Labor Statistics (BLS).
That income doesn’t leave a lot of extra cash for unexpected expenses or emergencies. The average American aged 65-69 has about $200,000 in retirement savings, according to an analysis of Federal Reserve data, and might still need to work even when they reach retirement age. High expenses often play a role.
These four categories of spending tend to eat into monthly expenses — here’s how you can shave some zeros off them.
1. Housing
Home costs represent the largest expense for retirees, accounting for 36% of their annual expenses, BLS figures show. Retirees who want to gain a leg up may want to consider downsizing as house prices remain high.
2. Transportation
If you aren’t working as much – or at all – you might want to swap the car for public transit or a bicycle. Transportation is the second-largest spending category, making up $7,160 in annual expenses for retirees, according to BLS figures.
3. Food
At $6,490, food expenditures account for over 12% of annual expenses for those 65 and over. Meal planning is one way to avoid overspending since it involves shopping for food items instead of regularly eating out — which can be an expensive habit.
4. Healthcare
Health spending makes up $7,030 in annual spending for retirees. One way to cut costs when health issues arise is to get easily affordable preventative care. That means staying up to date on screenings and vaccinations.
(Excerpt) Read more at moneywise.com ...
Doesn’t sound like they’re including taxes.
Great observation, especially property taxes.
I made a point of being completely debt free before retirement.
Still have property taxes, though.
Dear Boomers,
1. Live in a tiny house. [Lower housing cost!]
2. ... in a fifteen minute city [Lower transportation cost!]
3. ... and eat bugs [Lower food cost!]
4. ... and die. [Zero health care cost!]
Meanwhile your children’s children and their children are well on their way to owning nothing and being “happy”! Hooray!
... I’m opting out of this game.
My house is paid off, but it’s amazing how much you still have to spend.
My property taxes work out to about $550 per month. Homeowners insurance about $200 per month,
And then there is maintenance, yardwork, termite bond renewal, etc.
So I think the downsizing advice is good. When I retire, I am downsizing big time.
Yes paid up home. Made certain to have done that before pulling the plug on working. Meanwhile, home mortgage is just a portion of home ownership. I added up our home “ownership” costs on an annual basis. It came to circa 10K. Wow, how could it be so much. Well, property taxes and insurance costs (florida) alone bring them to 9K. Throw in maintenance and easily top 10K.
Meanwhile, our home is 60% of our net worth. So, why not sell it? Well, the taxman would be happy for sure. So, here we are with a paid for home. It looks nice. Our heirs love to see it. But the term “house poor” comes to mind. Ten years ago the costs were under 5K.
I was debt free and retired early, but God had other plans, he gifted me a daughter. Because of her I moved, bought a house with a mortgage, and needed to buy a truck. Was a lean year but now am debt free again.
Almost went back to work but covid stopped that.
Averages do not effect the reality of most folk
Yes, (insert obscene word here) property taxes!
House paid off but (******) property taxes eats over 40% of my total annual income.
And, there’s nothing I can do about it except sell my home.
And, half of those taxes are squandered on a corrupt and utterly dysfunctional school system.
Holy crap, you must be on the coast. I’m in the northern prairie and my 3BR2B house property taxes are $210/month and insurance $75/month.
Flyover country has it’s downsides, but also upsides.
🤣🤣🤣🤣
Aaaaargh, I think I broke something...
Being in debt in your 60s...and beyond...is not a good idea.
Good advice. What about a reverse mortgage?
Not to mention supplements and a healthy diet. :-)
When I quit my job in 2004 and went into biz for myself four something grand was what it had to come up with every month before I made penny one. Today I would kill to get back to that number.
>>Being in debt in your 60s...and beyond...is not a good idea.
My parents are both ~90 years old and only has 23 years left on their mortgage...how they convinced a bank to give them a new 30 year mortgage at 83 years old is beyond me....and why they were dumb enough to do it is also beyond me.
You can lead a horse to water, but you can’t make them drink.
You missed this one...
“staying up to date on screenings and vaccinations”.
So, #5 is, Get the vaxx, damnit!
Well, I’ve beaten the power curve.’
Own my own home outright, only pay utilities and property taxes
My vehicle expenses have been reduced by over 70 percent due to relocation and new proximity to all necessary services. My annual milage is around 6,500 / year.
We don’t eat out a lot and prepare our meals at home.
Medical - well, that is hard to avoid with advanced age, but working to keep those costs in line. But my average is no where near that amount for myself and the missis combined.
If you don’t own your own home , then your alternative is living somewhere and paying rent instead.
Yes it’s true homeownership is expensive even if you are mortgage free, but compare that to your alternative of paying rent.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.