Retirement. Say It Ain't So!

my mom travels regularly. Her travel expenses are about twice what they were prior to retirement.

her house is paid off. & she's free to enjoy herself. :)

oh, yeah...she's vacationing as I type this.

Having once lived in Florida, the retirement Mecca of the universe, I have witnessed the ways and means of the older crowd with my own eyes! They are living it up! We would never be able to get into a single restaurant between the hours of 5:30-6:30 because every silver-haired golden oldie was having dinner! Nobody ever cooked....I swear! They were always out shopping, at the beaches, dining out, traveling all over the place. You name it, they were doing it. It has to cost a fortune. Let's say that they just stopped cooking....which they do....and eat out at every meal. That alone is horrendously expensive. Believe me, I worry what kind of life I will have by the time I get to retirement age. At the rate I'm going here, looks like I'll be the Wal-Mart Greeter for a while if I want to be living the high life!

I want to travel much more frequently when my husband retires. We are also anticipating much higher medical cost than what older Americans have seen in the past. We are not relying on social security. The only cost I anticipate going down is our property taxes since we will down size but with the debt our country has we may be trading our property taxes for some new tax like a value added tax.

That's nonsense and a scare tactic. My parents are retired and they save quite a bit compared to what they were spending when they were younger. For one, they don't have a mortgage payment as that was paid off shortly after they retired. They aren't supporting children, so they are paying for groceries and utilities for 2 people and not 7. They have an active social life, but it's not an exorbitant one. They travel when they need and want to, because they can afford it. They don't have to buy clothes and supplies for work, spend money commuting, and can eat lunch at home. They use senior discounts for going to the movies and saving at restaurants.

As retirees, my parents have more money than they ever dreamed of (because my dad worked for the phone company for 45 years and cashed out a nice pension - he literally became a millionaire this year, something he never thought possible). In the two years since my dad has retired, their net worth has increased by more than 10% each year - their investments earn much more than they spend in a year.

It's important to save for retirement for sure - I work in that industry in my day job and can't emphasize enough that people in general are NOT saving enough. However, to say that people will spend more because they have more time is nonsense. People who spend more on discretionary things do so because they *can* and *want to* - yes, there are many retirees who spend more because they can finally spend the winter in a warm climate, or go on lavish vacations or join a country club or whatever. But that's not the norm and certainly isn't necessary.

I think the real concern for people facing retirement is healthcare. That's the one expense that is guaranteed to increase as you get older and is one that we have very little control over. If your choice is to get a hip replacement or lay in bed in debilitating pain until you die, you're going to get the hip replacement, kwim? Not really the same choice as wintering in Florida or New England.

Depends upon your lifestyle preferences. Some people are just "travelers" and "being out there entertained" types... some people are home bodies. If you are homebody, then I would say, no... it probably isn't true.
But if you are accustomed to, or you have been waiting until retirement when you have the time, to travel and be out and about doing entertaining things (eating out, movies, concerts, plays, experiences, what-have-you)... then you may spend more.

What OUR finance guy told us was that our expenses would go down. Kids grown and gone and no longer putting money INTO the retirement funds. Plus, without working and running kids around, our auto costs will be amazingly less: we average around $700 month just on gas for the cars. Not including insurance and maintenance for the average 25k miles per vehicle we typically drive.
Plus, we could conceivably downsize our home, reducing heating/cooling costs, and taxes. Certainly our grocery bill will be reduced (without a teen son in the house).

I "plan" for it to stay about the same.

If they have the disposable cash/savings, they do.

This has not been the case for me and my friends. I'm living now, 20 years after I retired, on the same amount I was earning when I was working which means I spend less. My income is literally the same amount. Of course, my expenses are different. I still have a similar life style. I suggest that what the retirement people is suggesting is that you need to consider the possibility of having a different life style once you retire. You, of course, you need make good plans to be able to maintain a similar income.

My in-laws definitely do! They travel all the time, shop more, buy more gifts for their grandchildren, and eat out more.

And don't forget the cost of health care if you don't qualify for Medicare. Long term care insurance is expensive, but it is a good idea.

I'm guessing the amount O. spends on entertainment in retirement is proportional to ones income during and savings accrued for retirement!
Not surprising.

It depends on what you want to do after you retire from the working world. Will you open your own business? Will you need a new car? Will you move to a new location? Will you travel? Will you renovate your home or make needed changes to the inside? Will you still need the latest electronic gadget?

I am also looking into this and am thinking how to get what I need in large items before I stop working. There is a time when I feel I will stop work but I have to have something to do at home. I am not one to just sit home and do nothing. So volunteering can/could become expensive depending on what you do.

Also medical issues could come up that could cause all your plans to go away. We are living longer as a nation and many of us may out live what we thought was sufficient in our golden years.

Thanks for the question.

the other S.

My parents retired 12 years ago. They have barely touched their retirement money. My dad has a pension, they live off of that (80% of his salary) plus taking occasionally from the investment account for things like a new roof, etc. They have the exact same amount of money today that they had when they retired 12 years ago (I know because we recently met with their financially planner to discuss end of life stuff).

I think it depends on who you are and what your goals are. My ILs are pretty budget-conscious. Always have been. They're homebodies, though. If people travel, they may also be spending money they are no longer spending on a mortgage, as many people try to pay off the house before retiring.

It really depends on the person. My mom doesn't go anywhere so she definitely spends no money on entertainment, other than her cable tv. Now, I know another woman who is on the go constantly so I imagine she spends more now on entertainment than she did when she was working and raising her children.

It just depends on the person. Some retirees spend their time volunteering so they are out and about, but not spending money.

if you no longer pay for kids school and you no longer have a mortgage, then overall, no. But as for the category of travel and entertainment, then i'd say yes thats true for that category.

I think you have to be careful & still be frugal when you retire.
Choose your expenditures wisely.
For example, save your big item spending for vacations.
Use your time to visit family by driving there etc.
Some reitrees' hobbies are expensive like golfing.
If you don't golf, you can find cheaper hobbies. :)
I think if you still live in your same house, have put a roof on it once, etc, you will be okay.