- In this video, I discuss the 10 expenses
that go up when you retire.
Coming up next on Holy Schmidt.
- [Narrator] Holy Schmidt!
(water splat)
- A few weeks ago, I posted a video on expenses
that go down when you retire.
Not surprisingly, a lot of people wanted to know
what those expenses were so that they could see
if that list applied to them
or could potentially apply to them,
depending on their age.
I had a few comments from people
that asked for similar video, but in reverse.
They wanted to know what expenses go up in retirement.
So this video is for those people.
And of course you and anybody else
who has an interest in the subject.
Before we begin, please make sure you click subscribe
and notifications so that you get alerted
The next time I post a video.
I post about twice a week.
All right, let's get into it.
Number one, and this is a big one, is travel.
When people retire they have a lot more time.
They're not working 40 hours a week,
and they try to fill that time with things
that they couldn't do or do as much of any way
when they were working.
Travel is a big expense,
particularly from the 65 to 75 year old age group
because that's when folks have a lot of energy
and the time and funds to engage in travel.
They often start working down their bucket list
as it's called and they'll go to places like India,
for some of them.
Others might just go to upstate New York,
many go to a destination somewhere in between.
While many people stopped traveling at age 75,
there are others that continue on into their eighties
and even in their nineties.
So 75 is not a hard stop for anyone.
Expense number two, is utilities.
Since you're home more,
you're going to be using more utilities at home.
You won't be at work every day, so the lights remain on
in the darker parts of your house.
You might be cooking three meals a day,
instead of ordering out one meal for lunch,
you might find that your water bill goes up
because you are showering twice a day,
once in the morning and once before you go out
or over to a friend's house.
The third expense is for fitness or exercise.
A lot of people join a health club
or even a country club if you have the means
that costs money.
And so if you're going to spend time on fitness,
whether it's in a club or maybe it's a new bike,
who knows, you do have the time
to spend more time exercising and taking care of yourself.
And a lot of people find that at this stage in their life,
they wanna make sure that they do.
In fact, do that.
Point number four, is on debt and debt service payments.
Unfortunately, the average retiree does have debt.
In fact, the average retiree spends 40% of their income
on debt service payments.
Payments on interest in principal,
on credit cards primarily.
As a side note, if you have the opportunity
to enter retirement with very little or no debt,
that 40% can go to other things
where you can enjoy yourself even more.
Point number five, is spending money
on things like books and reading.
With the extra time, people find
that they are more engaged in activities like reading
because it keeps the mind sharp
and helps pass the days in a very constructive way.
The sixth point, and probably the biggest expense
that goes up is healthcare.
Not just the cost of your insurance,
but out of pocket costs, et cetera.
As you can older, you spend more time
at the doctor's office.
You have more co-pays,
you have more out-of-pocket costs
and you may have some things that just aren't covered.
And so retirees find that their healthcare costs
go up significantly.
The next point is moving and relocation.
A lot of people move when they retire,
they don't stay in the house
that they raise the family in.
They head to Florida or Arizona,
another warm climate,
or just into a less expensive home
than the one that they raised their family in.
The next expense that goes up
are the day-to-day expenses.
People have a tendency to shop a little bit more
when they have free time.
And so some of the smaller expenses
that they would avoid while they were at work,
they don't avoid anymore.
Number nine, is charitable donations.
People in retirement have a tendency
to focus their time on things that they love.
And oftentimes some of the things that they love
involve charity work or charitable organizations.
It's not surprising that if they get involved
with a charity, sometimes they do work
with the charity or for the charity,
and they donate some of their hard earned money as well.
Point number 10, is financial planning.
This one actually is not surprising at all.
People in retirement need to make sure
that they have their numbers right.
Both in terms of how they spend their money
and where they spend their money.
And also what to do with it when they eventually pass.
A financial planner helps them with the answer
to all of those questions and many, many more.
As I mentioned in the beginning,
if you liked this video,
please make sure you click subscribe and notifications.
Retirement information is changing fast these days,
and I work very hard to get what's out there
in here for you.
This is Geoff Schmidt.
Thanks for watching.