I will most likely have just as many expenses in retirement, but they will be different expenses. To make room for the costs associated with growing old, I plan to ditch various expenses in retirement or maybe even sooner. It goes without saying I won't have as many expenses related to my two children such as childcare or tuition costs. As a member of the sandwich generation, many of my expenses now relate to aging parents and college-age children. A recent article by the AARP, pointed out that 42 percent of Generation X had a parent over the age of 65 and a financially dependent child in 2012. By the time I retire in another 30 years at age 70, my children will be set in their careers and our parents will be enjoying retirement on "the other side" unless they live past 100.
Being free of the mortgage
When we retire, we don't expect to have a mortgage payment. However, we will need to pay for homeowner's insurance and property taxes. Even though our insurance and taxes are just $230 a month at this time, I expect them to double by the time we retire. Our property taxes are still at an all-time low because of depressed property values. I can't count on that being the case in retirement. We can ditch our mortgage by just making our $900 payment each month for the next 14 years. We also have to resist the urge to upgrade to a more expensive home after our mortgage is paid.
Cutting the landline cord
We can save $50 a month now by cutting our landline. Each person in our family has a cellular phone. By the time we retire, I don't imagine anyone will even have a landline. However, we may be paying more for other kinds of new technology. By putting aside the $50 a month we used to spend on our landline, we can save for technology and entertainment costs in retirement.
Scaling back on insurance
We won't need to spend money on life insurance once we are retired. Since we won't be working in our 70s, we won't need disability insurance either. I plan to switch to higher deductibles on my auto insurance even before I retire. I'm just waiting until I have enough money set aside in an emergency account to self insurance against any losses.
Sharing just one car
Another way my husband and I will save money in retirement is by sharing one car. We plan to give up our second car since I like gardening and cooking at home. I estimate we will save at least $500 a month by giving up our second car. We may give up our second car if I switch to a work-at-home career in my 50s.
Once we are retired, we will switch from saving money for retirement to spending our retirement money. I imagine it won't take as long to spend it as it did to save it. By having fewer expenses, we will be able to stretch our retirement dollars.
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