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 ...
we retired and are not ready to downsize.
Maybe when my dogs die. But now i need the space.
BS
True that about flyover country having positives. Our property taxes are $1,200 annually -- $100/month for our 3BR2.5B house on 1.5 acres.
About others posting to pay off mortgage before retiring, I can see someone choosing not to do that if the interest rate is low and that person instead puts that money into Roth IRA's and Roth 401K's. But the trick is to do it with the same intensity as you would if you were instead paying off the mortgage. Just treat that portion of your Roth investments as your mortgage payoff amount.
From then it works two ways: either 1) use that extra investment money to pay the mortgage payment while the investments keep growing tax free (in Roths) faster than the low interest rate of the mortgage. Or 2) should you decide to part ways with the bank by paying off the mortgage immediately, you have the money to do it. (i.e. If you want to modify the house but the bank doesn't approve, no problem, you have the extra money in your investments to immediately pay off the mortgage and do what you want with the house).
You can buy a van or camper and live in the desert on BLM land. Travel and see the country, free to stay away from cities, or potential nuclear targets. Decisions, decisions.
Most, if not all, of the gain (sales price less cost of improvements less cost of purchase) would not be subject to tax.
I am shooting for a target retirement of about 20,000 per month. I doubt that I will spend that amount but working hard on investments to get there.
Going to try to live on about 4% or 5% of investments and 401k. Just hit 64 and hope to quit working at 66.
I wouldn’t as I don’t need too. However, unless you have a planned suicide you don’t know how long you’re going to be around. I know a guy that in 2012 had a massive heart attack, was in the hospital for 45 days and came home to die. While recuperating suddenly his wife developed brain cancer and was gone in 2 months. The guy did not follow his doctors’ directions, ate wrong, no exercise, but he is still alive today.
I am shooting for a target retirement of about $20,000 per month. I doubt that I will spend that amount but working hard on investments to get there.
Going to try to live on about 4% or 5% of investments and 401k. Just hit 64 and hope to quit working at 66.
I have no house payment but would like to buy a 2nd home in a sunshine state like Florida.
Current property taxes are about $5,000. no other payments as cars are paid.
One of the nice things about being an advocate of Intermittent and Extended fasting, is outside of the health benefits, it saves money on food.
Yah, retiring before owning your home is a sign of retiring too soon.
As to “bicycle”, what kind of idiot suggested this? Elders are brittle. One fall of a stupid bike and you are lucky to get back into a wheel chair for what remains. Public transport does not exist in burbs.
Or homeowners insurance. It’s out of control.
“The average American 65 years of age and up earns an annual pre-tax income of $55,335”
The average American above 65 isn’t “earning” anything. They are living off of savings, investments, and social security. Retirement means you have stopped working and are living off of what you earned through your working years.
The lack of additional earning is why it is a very bad idea to be using debt in retirement. Debt should only be used as a means of getting future returns, not supplementing current expenses.
One of our money goals before we retire is to have $130K in a high yield saving account. At 4% the interest will pay our property taxes. If interest rates fall back to .0001%, we will still have 34 years of property taxes in the hopper. Currently we have 1/3 of the target amount saved. So quite soon I think I can say with a degree of confidence that I truly own my home.
Re: Property taxes
I call it government rent.
“planned suicide”
Funny that came to mind when a poster mentioned the covid vax !!
Living in Florida is the challenge today.
We live 30 miles from the coast and refuse to pay for the losses of those who live miles from the water.
If you own your home, your home owner insurance firm must make available to you, windstorm-less coverage.
Our $9700/year normal coverage had a $50,000 deductible if we had a named storm loss. So we got rid of windstorm coverage.
Liability, fire, water pipe breakage, etc premium was under $1300 a year
I retired at 56 by selling my house and living off the money. Would have worked well if I didn’t have a child at 58 (blessed and lucky that happened). But because I wasn’t getting social security I had little actual income. I hit 59 1/2 in Dec 2014 and took out $50K from my IRA, and paid $0 in taxes because I had little income. Kept doing that, even converted to Roth again with no taxes, I didn’t initially plan that but it was a nice bonus.
If the vaxx kills you your expenses drop to zero.
Lol.
In many cities if elders take public transport they may get mugged or worse.
This article is trying to kill off old people.
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