What are the Biggest Expenses in Retirement?

Isabella Goode

Retirement is something that we spend our whole life preparing for, and many of us work hard to set ourselves up for the future. When we plan for retirement, we need to save plenty of money to cover the essentials. Fortunately, there are lots of services out there that can help us manage our money properly and discuss the funds that we should put away for daily expenditures, healthcare costs, and housing. However, no one ever prepares us for the biggest expenses that we will come across during retirement, so today, we will be taking a closer look at these.

Car Insurance

There are many advantages to owning a vehicle, but they do come with a cost. If you own a vehicle and plan to continue owning your vehicle during retirement, then you will need to look into ways to save money on running your car. In most cases, costs are out of your control, such as gas prices, repairs, etc.

However, one cost that is totally in your control is the price of car insurance. If you want a policy that offers great rates and rewards, then you should look into getting AARP car insurance. AARP auto insurance offers advantage programs, benefits, and savings for drivers over 50. Other ways to save money on transportation include selling the car and getting lifts or an annual pass for public transport.

Transportation

Transportation is the highest hidden cost we will face during retirement by far and will most likely cost you more than healthcare, something that will surprise many people. The vehicle you choose to own during retirement will play a huge part in how much you spend on transportation, but many ongoing costs of transportation will add up and take a chunk our of your retirement funds. If you can’t afford to drive or your health makes it unsafe, you will need to pay for public transport. If you manage to keep your car and the initial cost of ownership, you will need to pay for gas, maintenance, repairs, and most importantly, insurance.

Housing and Healthcare

As well as transportation costs, the two other large expenses you will experience during retirement will be housing and healthcare. If you end up needing to go into residential care, then these two costs will work together. Unless you are a homeowner and have paid off your mortgage, you will need to make sure your retirement funds will cover your mortgage costs until they are paid off, or ongoing rent payments. You will need to continue to pay for your bills and health insurance far into retirement, plus any other medical costs if you require attention or treatment for a health condition.

Having enough money for retirement is crucial, as it will determine your quality of life once you retire and will affect how much you can enjoy it. Understanding the biggest expenses that you will face will give you plenty of time to plan ahead, which will save you money in the future.

About Retire Early Lifestyle

Billy and Akaisha Kaderli retired three decades ago at the age of 38 and began traveling the world. As recognized retirement experts and internationally published authors on topics of finance and world travel, they have been interviewed about retirement issues by The Wall Street Journal, Kiplinger's Personal Finance Magazine, The Motley Fool Rule Your Retirement newsletter, nationally syndicated radio talk shows and countless newspapers and TV shows nationally and worldwide. They wrote the popular books The Adventurer's Guide to Early Retirement (Your Simple Path to FIRE) and Your Retirement Dream IS Possible.
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