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The top 5 Retirement Expenses

The question of retiring and doing so comfortably is individual and depends on many factors. After years of working, some rely solely on Social Security benefits. Some are fortunate enough to have a retirement plan through work or financial planning. Some have acquired assets that provide added cushion and peace of mind upon retirement. Silver Chats looks at the cost of retirement living and tips on making ends meet. What changes do we need to make when we retire? 

Many older adults worry about how they will make it on a fixed income. The current inflation rate is 3.3%. Prices have risen 20.8% since the pandemic-induced recession several years ago in 2020. For many, our incomes have not met the rising cost of living. A more disturbing rumor is that SSA will be insolvent by 2035. 

The average cost of living in 2024 for a single retired person aged 65 and older is $57,818.00 a year. According to the Bureau of Labor, the average annual income of someone 65 and older is $55,335.  

The average SSA monthly payment is $1778. In the US, 25% of retirees live on $1500 per month, but according to Nasdaq, living on $1500 per month is doable with planning and smart decision-making. You are lucky if you have an IRA or another retirement source to augment your SSA and can easily make ends meet without making many financial lifestyle changes. The rule of thumb for calculating an individual retirement budget is 70–80% of what you were living on before leaving the workforce. For example, if you lived on $2,000 monthly, plan on $1600. 

We all need to make adjustments in retirement. Silver Chats has ranked the top 5 retirement expenditures and offers tips on how to lower those costs.

  • #1 Housing
Housing expenditures make up 35% of the monthly budget. This includes mortgage payments, rent, and property taxes. A recent study showed that 34% of homeowners 65–74 years of age were still paying off mortgages. There are things we can do to decrease this big monthly cost. Here are some tips for lowering housing costs: 
-Pay off your mortgage before retiring
 -Downsize to a smaller dwelling
-Move to a state with a lower cost of living 
-Choose a mobile lifestyle
-Shared housing

  • #2 Transportation
If you were a commuter to work, you may think that transportation costs would decline significantly. Guess again. This includes gas, insurance (which goes up substantially with age), maintenance and repairs, car rentals, leases, payments, and public transportation (Uber, Lyft, taxis, etc). The cost of all those expenditures increased 14% over last year. Retirees saw the cost of owning their vehicles increase from $600 monthly to over $1000. Here are some tips for lowering transportation costs:
 -Shop around annually for car insurance
 -If you have a multi-vehicle household, consider downsizing to one vehicle
 -Use ride-hailing services like Uber or Lyft
-Take advantage of senior discount programs through AAA or AARP.
-Purchase a bike for running short, local errands



  • #3 Healthcare
This category includes health insurance, medical services, medical supplies and drugs, as well as, hearing, vision, and dental costs. Retirees spend an average of $7500 a year on healthcare. That marks a 20% increase in healthcare costs after age 65. This is why holistic aging practices are so important. Making decisions based on physical and mental wellness has never been more important for our well-being and our pocketbooks.

Here are several tips for improving healthcare costs: 
-Shop annually for a Medicare supplemental plan. They aren’t all the same, and some plans you only pay for if you use them
.-Implement holistic aging practices to balance physical and mental well-being, providing space for love and spirituality through a positive, healthy lifestyle 
-See if you qualify for HSA eligibility
-Travel to a foreign country for dental or other medical care. Often, the services are the same, but at far lower costs than in the USA

  • #4 Food
The current price index says a single retired person spends over $600 a month on food. That includes groceries and eating out. Historically, food costs have risen 12-13% annually. Food is, therefore, the fourth biggest expense for retirees. That represents about 25% of an individual's monthly income. There are several tips for countering high food costs.
-Buy bulk at Costco or other sources and save on the individual cost of purchasing. 
-Plan out low-cost meals in advance-Many companies have senior days and offer discounts 
-Plant a garden and grow your favorite vegetables. 
-Using store apps or store weekly ads and coupons
-Make homemade bread, jam, salsa, salad dressings, sauces, etc.; this ensures ingredient content, cuts grocery costs, and offers a fresh, healthy alternative to store-bought.



      • #5 Utilities
      These are living expenses such as electricity, water, gas, heating, sewage, trash collecting, recycling, and technology subscriptions (internet, cable, security, app charges, etc.) These are monthly expenditures that are necessities for many of us. Here are some tips on how to mitigate these costs:
      -Check out your local utility company for customer energy assistance programs 
      -Adjust thermostat settings
      -Change or clean filters and do regular maintenance on equipment
      -Switch to LED lights and smart lights and turn them off when not needed
       -Unplug electronics when not in use
       -Old appliances and electrical units use more energy; consider upgrading to newer ones
Financial planning for retirement allows us to design a simpler, fuller lifestyle free from the constraints of our working years. We can let go of possessions that weigh us down and follow a path that leads to physical, mental, and spiritual wellness. We no longer need to accumulate belongings, stress over jobs, or adhere to a social norm. There are some simple lifestyle changes we can adopt to help us age more comfortably. By adopting holistic aging practices and accepting small changes, we can discover the endless possibilities of aging. 
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