Retirement can bring up a number of concerns, from lifestyle and health to social activeness. There’s also the issue of money. Many people worry about retirement spending, how much they need to save, and how this may affect their current money habits.
In a survey by Allianz Life, nearly one-third of Americans said they are “panicked” or “very worried” about cost-of-living increases and their effects on their retirement lifestyle. 6 in 10, or 64%, said they don’t have a plan to combat rising costs of living in retirement.
From the standpoint of pre-retirement preparation, this brings up an important point: Does spending tend to increase in retirement? Answering this question may play into decisions of managing expenses, controlling spending, and saving for retirement today.
Compared to pre-retirement, many Americans may expect their retirement spending to go down. Having fewer or no commutes to work, children moving out, paying off debts such as a mortgage, not having to deal with a wardrobe for work... these are just a few areas in which expenses can fall.
But many retirees may even see their expenses go up. Healthcare and personal care costs tend to increase sharply. Housing costs, such as home repairs or a roof replacement, may arise if you continue to live in the same place for years. Then there’s time – simply much more time for people to do things and spend money.
So, while there’s no ballpark answer, it’s important to have some idea of potential retirement spending. Here’s a quick look at some data findings and other helpful insights.
