7 Expenses You Can Eliminate in Retirement

9:26 pm Retirement Planning

Taxes2 7 Expenses You Can Eliminate in RetirementCreating a retirement budget is a challenge for most of us since estimating what we will actually spend in our retirement years – which can span several decades – can be almost impossible.  However, the need to plan for retirement is essential, so when making up your budget, consider these 7 expenses that you may be able to eliminate entirely:

Saving for retirement.  All those years of saving for retirement end when you actually retire, which can leave you with a significant bump in your monthly income.

Mortgage.  Most experts believe you should pay off your mortgage by the time you retire.  By doing so, you can reduce your monthly expenses – but don’t forget you will still be paying for insurance, property tax and maintenance.

Commuting.  Depending on where you live, you can increase your monthly income in retirement by eliminating what it used to cost you to commute back and forth to your job.

Life insurance.  While there are some exceptions, retirees will not usually need life insurance since they are no longer supporting dependents.

Family expenses.  Raising a family costs a lot of money, so once the children are out of college and on their own, these expenses fall dramatically.  Be careful, though – studies show that empty-nesters are apt to raise their spending once the children are gone and they find themselves with extra cash.  Better to stash it away.

Payroll taxes.  Once you are not longer earning a paycheck, you will not be paying taxes for Social Security and Medicare.

Second vehicle.  Many retired couples find that it is no longer necessary to maintain two vehicles.  Eliminating a vehicle rids you of car payments, insurance and maintenance costs.

For more insights into effective retirement planning, contact our Orange County law firm.

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