Will needs really change in retirement?

[forHISglory]

Before I retired,I kept reading about how my needs in retirement would change and it wouldn't cost so much to live.

What do you think? If you have retired, do you find that it takes less to live on? If you have not yet retired, do you think that in the future, you'll be able to live on less?

[pollypurebred39]

I'm not retired, but my Mother says it cost her more now because of unexpected health problems that came on like a flash out of no where. First she injured her shoulder and needed several surgeries, and lots of therapy. She then had a heart attack from an undiagnosed childhood heart condition (could not be detected until heart attack) required a pacemaker, then she developed Diabetes (thin all her life and always ate well and exercised) colon Cancer soon followed, and now breast Cancer. All this started when she turned 60. She went from an extremely healthy person to one that has lots of medical bills and expensive medications. The best part is she has stellar health care and she's still paying through the nose. She has recently realized that she can't afford to keep her car on the road and pay for her medical/medicines also, so the car's got to go. I'll take her where she needs to go.

I would say if she never had health problems develop she'd need less to live because she downsized her life drastically before retiring.

I'm hoping we will be able to live on less. I'm counting on being debt free, and having our house fixed up, roof replaced, new heater, new appliances, solar energy so no electric or heating bill, etc. It would be great if we had all housewares, HAB and other needs stockpiled so that was not an outgoing expense in our retirement. If we plan properly it might work out that way.

[3tomboys]

I have quite a while before I retire, but I think my needs will be different. I feel that some items will increase (medical expenses). I also hope to travel, not jetset all over the world, but be able to take a trip here or there. Thats not really a need, its something I want to do. Of course the financial advisor thinks we need an enormous amount of money, but we aren't so sure. We think that if our home and car are paid for and have no debt it will be a big advantage. Of course inflation is a factor. We have always been do it yourselfers, but my DH climbing on a roof in his later years scares me, so there are things that we may have done in the past that we will have to have someone else do. We have always lived within our means, even when the going was tough so we have always been of the opinion that what we have when we retire is what we will have. We have also been good about saving for retirement, so hopefully there will be enough when the time comes.

[greekislandgirl]

Two of our bigger expenses, which are housing and retirement savings, should be pretty much gone by then, as I would hope we wouldn't have a mortgage at retirement. We still have a long way to go until then, but our plan is to live on less than we would be living on in our 40s, probably about what we live on now (in our 30s), all of that adjusted for inflation of course. It's still too far away to say for sure, but I've been saving for retirement since my 18th birthday and not having to put that money away will be a break by itself.

[mndtrp]

The majority of the articles I've read state that while your needs may change, your cost of living will not. Between inflation, higher health care costs, medications, etc, thinking you will be spending less in retirement is unlikely. I would not plan on spending significantly less when you retire.

[Debbie-cat]

My Mom retired a little over a gear ago. She lies on her own and says it is way cheaper now than when she was working. She paid her house off a few years before retirement but didn't buy her house (first one she ever owned) only 10 years prior. She says she now has time to be more frugal....worked fulltime before and walked everywhere .....her job was over two miles from her house. She says now she can take her time, make her meals and watch what she spends. She is also taking in more on her retirement than she did when she was working.

[monkeywrangler71]

I expect our expenses at retirement to be lower than now. Our children will be grown and hopefully supporting themselves, our mortgage will be paid, and we will no longer be contributing to retirement and education savings - which currently sucks up about 40% of our income.

[Darlene]

Our biggest savings comes from seldom driving. Grocery store moved in last year & is within walking distance and hubby no longer drives 20 miles each way to work.
We have fun finding creative ways to make the most of everything, making them last. Latest project had us making a new top to our glass topped patio table when a freak wind pulled the umbrella out and it landed on the glass & shattered it. Hubby took some wood we had around, routed the edges to make it fit into the frame of the table. It came out nice, is sanded & primed & ready for paint we'll get next time we make a trip into town. It's not as nice/new looking as the glass but it's sturdier & will last for years.
We decided long ago that we would live on one income & in hindsight I should have at least had a part time job adding to our nest egg. We are doing OK but everything else keeps going up price wise and we are finding that at least a part time job would make things around here nicer & would give us a bit more breathing room. He's worked all those years & now it's my turn so I've spent time this week filling out applications for a few places and hope to hear something soon. Anyone out there hiring a lady who loves people, not afraid to learn something new, hasn't worked a paying job since her kids were born but has alot of real life smarts and skills and wants to give you her best?

My advise to all, know that the future does come and while you are able to earn, do so & save every penny you can.

[Ssindi]

Four days until retirement here! So of course our well and pump went out yesterday.

I'm hoping we can live for less.No work clothes,less gas and no lunches to pack. But then there are three meals a day at home and the high price of gas right now.

We shall see!

[peanut]

We have 2 years till retirement. DH is 7 years older than I and is taking early retirement on a full pension. We are a one income couple in a very desirable neighborhood, sitting on a big property and house probably worth $400,000CAD 'as is' without fixing it up before selling.

It looks good. Having said that, DH's "full pension" is really only 40% of his current gross pay. Which is going to be an issue. I fully expect we'll have to either buy down in houses or take in boarders, which we could do and have done.

I also fully expect that DH and I will pursue other lines of self-employment once he's retired. I am already working on one by gaining experience through the church with Crafting for Missions. DH has plans as well.

The biggest change for us, even though we're in Canada, is going to be medical. Right now we're running about $300/mth. in medical expenses for me, after our health insurance pays their share. Plus DH wants to travel - long distance driving. So I don't anticipate any savings in the area of transportation!

Where I do expect savings is in clothing costs for work. He needs suits and ties and 'business casual' for work. He'll be happy to hang out in jeans and a t-shirt when he's retired.

Also, I expect less eating out. With two of us willing and able to cook we'll just be helping each other in the kitchen more. Right now days get so busy he is often too tired to help cook when I am too tired, so we end up ordering in.

I actually am interested in seeing how this pans out for us. We have lots of options, and that's the big thing. I like to be able to keep as many options open as possible. If push comes to shove, I could probably work a part time job. Just not full time. Stress would kill me either way I'm thinking. But we'll see. As Darlene said, DH has done his time, it will be time for me to work.

[frugalwarrior2]

-Well w/ the house paid off it will be 20,000 less incl. keeping tx and house ins. in mind.

-2 people instead of four (less clothes,utilities,groceries)
-no pets instead of $4000. a year
-no contributions to 401K/roth
-maybe 1 car to run and insure
-I hope to eat less-mom does
-medicare pays very well for my parents-just pennies for meds
-Frugal me looks forward to senior discounts on EVERYTHING.
-I just don't see me buying as much. But rising costs do worry.

I always thought about 50% of DH's salary.

[forHISglory]

Some very thoughtful replies. My hubby retired in 2006 and I retired in 2007 from full time teaching. But we both continued to teach part time (which gave us some buffer money) until last month. So we have been fully retired for about 3 weeks! It's a little too early for us to tell if our spending will go up, down, or stay the same, but I can give some observations.

1. With no debt (including mortgage), it makes budgeting MUCH easier. If I could offer advice to those who are younger, it would be to have no debt whatsoever when you retire.
2. No commuting travel expenses. I commuted about an hour each way to my job, and that would have been cost prohibitive with the gas prices now. However, we are doing some little trips, so there goes the gas money that we were saving!! And we still have both of our vehicles.
3. Food bill is not changing at all. We aways brown bagged left overs for lunch when teaching, and now we eat leftovers for lunch still!
4. We are not contributing to retirement savings any longer. In fact, we now are drawing an income stream from our savings.
5. Housing costs are still the same, including utilities. Utilities may be slightly higher since we are home all day.
6. We no longer keep up a professional wardrobe. When we went to part time, we just didn't need as many clothes, and now we are content in jeans and T's.
7. Health insurance is the biggie. When we worked full time, we paid some on it, but our employers picked up most of the cost. Now we pick up the entire tab. We do belong to a group plan, which helps, but this still takes 1/3 of the pension money.
8. We are now on Social Security. We make more from that than we did doing our part time teaching. But hubby's pension from teaching is only a percentage of what he made prior to retirement. (thankfully, it will continue for me if he dies first). But between our income stream from savings, Social Security, and pension, we are doing OK, and even have had enough to do some improvements around the house.

Overall, we still spend about as much total as we did prior to retiring. Of course, we weren't big spenders then....

[dcompton]

I expect mine to be about the same, or more likely, higher. I have excellent health insurance at my job that is quite inexpensive - about $133 a month, and that with a $500 deductible, no copays, and most prescriptions free or only 10% of cost. Can Medicare match that? I haven't explored it, but I doubt it. I anticipate health care costs going up.

Other than that, I rent very inexpensively for this area. Yes, I will have to continue paying rent, but I will have no house or lawn upkeep costs or property taxes. I consider that something of a wash. I spend little on clothing now, and driving is already minimal. I will be driving less, not going to work, but we're not talking about much savings here. Utilities will probably go up when I am home all the time, but probably not by too much. I will have to seriously watch hobby expenses. However, I have a large enough stockpile of some (yarn, puzzles, ink) to coast quite a while.

For a lot of life reasons, my social security will be small, so I will be relying a lot of retirement accounts, and that depends on how much I can keep stashing away and what the economy does. That's a little unnerving, but there's nothing I can to do fix it, so I don't worry about it.

I agree with something one poster said - the one advantage is that I will have more time to be frugal. Since I live alone, there is no help around the place, and after working full time, I just don't have the energy to be a diligent as I could be, and I do take some non-frugal short cuts now, as a matter of day to day survival. I know I do much better when I am on vacation.

So though the picture isn't all roses, it's not completely desperate. I still have, health permitting, several years to keep stashing money in retirement. All I can do is hope in the end it will be enough.

[frugalwarrior2]

Dcompton-mom pays as little as .79 for a 3 month prescription generic. They have medicare and supplimental. Ironically if medicare refuses something the supplimental will not pick it up. It will only pay the diff. medicare won't.
Dental is actually their nemesis. They have a semi retired dentist who gives rates but mom has bad teeth.

Most of our gas is used my teens. Dh works at home and I don't work. The grocery is across the street and we bank online.

Decided not to fugure SSI into our equation. It can be the icing if we get it.

We buy clothes used often incl. prof. attire. So that shouldn't change much. As DH works at home we save enormously on dry cleaning.

Repairs scare me. We are not in good shape so many things must be redone in the next 5-8 years. We are prob. not moving as MI. is still dropping.

[MaryCarney]

GREAT THREAD!
I anticipate expenses will go down a little, but not a huge amount. While DH and I are in our late 50's , we still have two teens at home to get through college.
Once they are gone, we'll no longer carry our expensive term life ins. policies (expensive because we were stupid and didn't take them out until we were older).
Gas will be much less, as I currently use a tank and a half a week communting to my hospital job in the city.
Mortgage will be gone in just a few years.
But honestly, while DH cannot WAIT to retire, I have absolutely no plans to do so. I'm in the middle of a master's degree program which should open up opportunity for me to work as a nursing instructor online from home. I plan to turn the upstairs into an office for myself - and still bring in a FT income.
I spent 8 years as a SAHM, and while I loved every minute of it - without kids to care for and homeschool, I would be bored.
Thanks for starting this thread! Food for thought.