Expenses that could Diminish Totally after Retiring
Many individuals stress about being able to save enough money for retirement, which is understandable – especially as living costs continue to escalate at such alarming rates. Although the cost of many items will increase further over time, the good news is that there are a few expenses that could diminish or even disappear totally once you’re no longer putting in 40 hour weeks at the office.
Some Forms of Tax
While you’re receiving paychecks, you’re having just over 6% of your earnings deducted for Social Security and approximately 1.5% to support Medicare, which amounts to a chunk of almost 8%. Once your paychecks come to an end though, so will your contributions to these two sources. However, keep in mind that taxes will need to be paid on any Social Security benefit payments you receive.
The cost of driving or taking public transport to and from the office certainly adds up over time. Families where both parents have their own vehicles have to cover the cost of gas, maintenance, licensing and insurance for them. Research has revealed that it can cot as much as $10,000 per year to own a vehicle.
Once you’ve retired, chances are that you’ll be able to get by with just one vehicle, meaning that the costs mentioned above could be reduced substantially.
Most working families have extremely busy schedules, resulting in a number of meals being eaten at restaurants or fast food outlets because it’s easier than spending a lot of time preparing food at home. Average American families spend between $200 and $300 per month on fast food and restaurant meals per month.
When you no longer have to go to the office every day, you may find that you’ll enjoy taking your time to prepare tasty meals at home – which will save hundreds of dollars over the course of a year.
Dressing the part when working in the corporate world is often quite costly, especially if formal attire is required. In addition, dry cleaning can also set you back a few hundred dollars per year. After retiring though, you’ll be able to dress more comfortably – and of course more affordably because you’ll no longer be compelled to purchase specific types of clothing.
Retirement Account Contributions
After stopping work, you won’t have to continue contributing to your retirement accounts any longer either. All the years of saving wherever possible will finally pay off and you’ll be able to truly enjoy your golden years.
While you’ll now be able to hold on to more of the money that’s now coming in, it’s crucial that you continue to budget accordingly. This will help ensure that you’re able to continue covering the cost of living without going short anywhere.
Although it’s stressful ensuring that you’re saving enough for retirement, it’s a comfort to know that some of your expenses will reduce or even disappear during this time of your life. If you would like to learn more about saving for retirement in the best way possible, contact us today.