Page 6 - Ed guide 2022 Feb

Prime
How expenses can change

during retirement

ork is a major component
of daily life, so much so that

WAndrew 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 career. twice a day, and the average driver puts • Housing: Your mortgage may be paid

No such adjustment is as significant as in 13,474 miles behind the wheel each off before or soon after retirement. That
the financial one. Most people find their year — with people between the ages eliminates the single largest expense in

post-retirement income is considerably of 35 and 54 clocking close to 15,000 many people’s budgets. If your home will
less than when they were working full- miles. Less time spent in the car means not be paid off, it’s possible to downsize
time. That is why financial planners fewer gasoline fill-ups and longer durations to reduce monthly payments.
often recommend saving and investing between oil changes and other services. In • Travel: While many other expenses

enough during working years to be able addition, based on the Internal Revenue can go down, travel is one expense that
to replace 80 percent of preretirement Service reimbursement rate of 58 cents can shoot up during retirement. But many
income. Certain expenses get lower after per mile, a typical commute of 20 to 30 people are happy to bear this cost. With

retirement, but some will rise. Here’s miles a day costs $11 to $16 a day or $55 more time for travel, retirees may allocate
a look at what to expect when the bills to $80 a week. In a year, you could easily more funds toward vacations and other
come due during retirement. be spending $2,000 to $4,000 a year great escapes.
• Food costs: Food costs may go down commuting if you live within 15 miles of • Health care: Seniors often see their
The Morning Call in retirement because shopping and your job. Without commuting, that cash health care needs and costs go up after

preparing meals for one or two people is
stays in your pocket.
retirement. It’s important to understand
much less costly than feeding a family of
four or more. However, dining out may • Taxes: Many people can expect to be what is covered by health plans, and it’s
| increase as you have more free time to done paying federal income taxes when equally important to set money aside for
Sunday, January 23, 2022 visit local eateries. income. If the majority of retirement savings Many costs of living decrease after
they are retired and no longer earning an
unforeseen medical expenses.

• Automotive costs: According to
retirement. However, it is wise to take in
were in Roth IRA accounts, contributions
data from the U.S. Department of
the whole picture to understand how to
are available for withdrawal tax- and
spends 25.8 minutes behind the wheel
6 Transportation, the average commuter penalty-free at any age. budget for retirement.