Retirement is a time many people prudently save for so they can maintain a certain level of comfort and care as they age. The more you put away ahead of time, the less you have to worry about financial burdens during this stage of life after you’ve exited the workforce.
As part of financial planning for your retirement, however, it’s worth considering what major expenses you won’t bear anymore, along with those you will. One of the best reasons for moving to a senior living community near Federal Way after you’ve retired is that many of your retirement expenses will become consolidated. Rather than worrying about mortgage payments, utilities, cable, yard service, housekeeping, meals and all the other costs related to home ownership, you pay one monthly fee and can spend your savings on other things you need and enjoy!
What Expenses Decrease During Retirement?
Although your overall monthly income or budget may be smaller than it was when you were working, leaving behind certain expenses can make it feel as if you have more to live off of. As you’re calculating average retirement expenses and putting together a budget plan for yourself or a family member, here are nine expenses you can expect to decrease or completely vanish post-retirement:
Once you have moved into a retirement community in Federal Way, you no longer have to pay a mortgage or rent on your own property, which is one of the biggest factors in many retirees' reduced cost of living, according to NOLO. If you still owe money on your home and you itemize your taxes, you are getting a mortgage interest deduction. Even if you’ve fully paid off your home, you no longer have to worry about property taxes and other fees. The money you net from eliminating this major household expense can go toward financing your housing accommodations during retirement.
Related Reading: Fact or Fiction? 10 Independent Living Myths in Federal Way
2. Household Maintenance
You can also anticipate the financial advantage of no longer having to pay for interior home maintenance and yard care. At a retirement community in Federal Way, all the facilities and grounds are cared for by the staff so you no longer have to spend time, energy and money to maintain your house and property. Meanwhile, you have access to top-notch facilities, on-site gardens, and walking trails by virtue of being part of the community.
The cost of vehicle maintenance, gas, and parking can add up significantly for people who commute frequently for various responsibilities. Particularly if you reside in an urban area such as Federal Way, Tacoma, or Seattle, you could be spending hundreds per year to use and care for your vehicle - or even to NOT be using your vehicle.
Once you’ve retired, your car-related expenses typically decrease as you no longer have to drive as much and your car endures less wear and tear. Some people even opt for getting rid of their car (or their secondary car) entirely, as many senior living communities are built in close proximity to restaurants, parks, shopping, and other attractions and offer regular transportation for you to get out and about.
4. Life Insurance Premiums
The main reason to pay into life insurance is to ensure your dependents don’t experience financial hardship if you pass away while being the one to provide for them. By the time most people reach retirement age, however, they are no longer the primary wage-earner for several dependents and, therefore, do not need life insurance for the benefit of dependents. While there are some exceptions, you likely will not need to allocate part of your monthly budget to this expense. If you want to maintain a small policy to cover funeral expenses, that can be found for a relatively inexpensive rate.
5. Payroll Taxes
Anyone who has taken a good look at their pay stub knows a fairly high percentage of their earned income goes to various payroll taxes for Social Security and Medicare each pay period. If you are living off your retirement savings and have no earned income, your payroll taxes will disappear as an expense.
6. Child-Related Expenses
There are a lot of expenses associated with raising a family: clothes, housing, medical care, food, education, and transportation. Collectively, these costs can siphon a significant amount of your monthly budget while you’re raising children or even supporting your young adults through college. Fortunately, these expenses dissipate over time as your children become self-sufficient and no longer require your financial support, and they should no longer be part of your budget by the time you retire.
7. Retirement Savings
Retirement savings are not exactly an expense, according to the U.S. News & World Report, but if you’ve been diligently contributing part of your monthly income into your 401(k), Roth IRA, or other retirement savings account, then it will make a big difference when you no longer have to do so. Removing this one item can account for a significant reduction in your monthly cost of living.
This likely isn’t an expense that will go away, and one that may actually increase, but it’s an area where you can reduce expenses. Once you’ve retired, you have more flexibility as to when you choose to fly or take another mode of transportation, so you can take advantage of cheaper plane, train or bus tickets, according to NOLO. Additionally, programs such as Elderhostel can give you access to more affordable travel experiences during your senior years.
9. Entertainment and Leisure Activities
Seniors can reduce entertainment expenses in a couple ways, as well. First, most senior living communities offer a full range of on-site programs, events and activities that you can experience for free. Secondly, many local attractions and establishments near Federal Way also offer discounts and special rates for older patrons. You can seek out these establishments or find the days and times when they cater more specifically to seniors.
Retire for Less in Federal Way
It’s difficult to estimate just how much to budget for your retirement planning, but the more you can consolidate and eliminate certain household expenses, the more simplified and stress-free your life will be as you age. That’s one benefit of choosing a senior residential community like Village Green Retirement Campus. Instead of having to worry about numerous bills, you can consolidate several of your expenses, from housing to food and transportation, into one single monthly or annual fee while having access to accommodations, dining services, and amenities designed to make your life comfortable and convenient.
“7 Expenses That Vanish During Retirement.” U.S. News & World Report. Accessed online at https://money.usnews.com/money/blogs/on-retirement/2013/11/04/7-expenses-that-vanish-during-retirement
“How Much Money Will You Need When You Retire?” NOLO. Accessed online at https://www.nolo.com/legal-encyclopedia/retirement-money-how-much-need-29908.html
“6 Big Expenses You Will No Longer Have In Retirement.” DoughRoller. Accessed online at https://www.doughroller.net/retirement-planning/expenses-you-will-no-longer-have-in-retirement/