The Average Spending Goes Down
Typically, retirees spend only about 80 percent of what they spent during their working years. Though healthcare costs typically increase, costs of food, transportation, housing and amusement decline. Plus, you don’t have to save for retirement anymore, so if you were putting 10 percent of your income in your 401k or IRA, that’s a 10 percent cost reduction by itself.
For example, some retirees find they only need one car, or they go carless, which cuts not only gas costs but also insurance, maintenance and registration fees. This isn’t true in every case, but if you plan your budget and stick to it, you can live comfortably on a lot less than you were used to.
