- Transportation – Thanks to the pandemic, you already have a sneak peek at how much you’ll spend in retirement on transportation. Giving the fact that most of us have embraced working from home, transportation has become a non-existent issue, money-wise. The same goes for your retirement: you’ll be using your vehicles far less, plus you won’t have to wait endlessly on rush-hour traffic. Before the pandemic, an average worker spent an hour a day commuting.
- Clothing – During retirement, you won’t spend as much money on clothes such as shirts or high heels! So your bank balance will definitely get a break from updating your work wardrobe. The average retired household spends $1,070 a year on clothing, while the average working household spends $1,866 a year. Do the math, the numbers are bad. Plus, you should count the money you’ll save on dry cleaning.
- Groceries – You might be tempted to believe you’ll spend your money on steak dinners and brunch dates, but in reality, you’ll spend less when you’re retired. The average household spends 25% on food in retirement. Erik Hurst and Mark Aguiar, professors from the University of Chicago and Princeton University, believe that the logic to this is simple: you have more time to shop. You won’t be in a hurry at the grocery store anymore, so you’ll have more time to compare prices on similar products, use coupons and spend more time planning meals for the week.
- Entertainment – “There’ll be time to see all the concerts in the world” you might think. There’s a common belief that you’ll have more time for entertaining activities in retirement, such as concerts, movies, clogging, whatever you can think of. But in reality, the numbers are stating the opposite. The decline will correspond with changes in mobility as you become older. Also, you might feel more nervous in crowds due to the pandemic.
