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20 SUNDAY, JANUARY 24, 2021 THE MORNING CALL
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Prime
How expenses can change
during retirement
ork is a major
component of daily
Wlife, so much so that
Andrew Naber, an industrial and
organizational psychologist and an
associate behavioral scientist at
RAND Corp., determined that the
average person spends 90,000 hours
at work over the course of his or
her lifetime.According to a 2014
Gallup poll, the average American
retires at age 62, but roughly 64
percent of professionals bid farewell
to the workplace between ages 55
and 65.
Retirees must make a number
of adjustments once they call it a behind the wheel twice a day, and the • Housing: Your mortgage may
career. No such adjustment is as average driver puts in 13,474 miles be paid off before or soon after
significant as the financial one. Most behind the wheel each year — with retirement.That eliminates the single
people find their post-retirement people between the ages of 35 and largest expense in many people’s
income is considerably less than 54 clocking close to 15,000 miles. budgets. If your home will not be
when they were working full-time. Less time spent in the car means paid off, it’s possible to downsize to
That is why financial planners often fewer gasoline fill-ups and longer reduce monthly payments.
recommend saving and investing durations between oil changes and • Travel: While many other
enough during working years to other services. In addition, based expenses can go down, travel is one
be able to replace 80 percent of on the Internal Revenue Service expense that can shoot up during
preretirement income. Certain reimbursement rate of 58 cents per retirement. But many people are
expenses get lower after retirement, mile, a typical commute of 20 to 30 happy to bear this cost.With more
but some will rise. Here’s a look at miles a day costs $11 to $16 a day time for travel, retirees may allocate
what to expect when the bills come or $55 to $80 a week. In a year, you more funds toward vacations and
due during retirement. could easily be spending $2,000 to other great escapes.
• Food costs: Food costs may $4,000 a year commuting if you live • Health care: Seniors often see
go down in retirement because within 15 miles of your job.Without their health care needs and costs go
shopping and preparing meals for commuting, that cash stays in your up after retirement. It’s important
one or two people is much less pocket. to understand what is covered
costly than feeding a family of four • Taxes: Many people can expect to by health plans, and it’s equally
or more. However, dining out may be done paying federal income taxes important to set money aside for
increase as you have more free time when they are retired and no longer unforeseen medical expenses.
to visit local eateries. earning an income. If the majority of Many costs of living decrease after
• Automotive costs: According retirement savings were in Roth IRA retirement. However, it is wise
to data from the U.S. Department accounts, contributions are available to take in the whole picture to
ofTransportation, the average for withdrawal tax- and penalty-free understand how to budget for
commuter spends 25.8 minutes at any age. retirement.
