3 Expenses that Will Go Up After Retirement
- Expenses typically decrease after retirement, but many don’t realize there are three that will probably increase.
- People 65 and older spend more on healthcare, charitable giving, and travel than they did prior to retirement.
- Planning for increased spending in these areas during the pre-retirement years can help you ensure you’ll have enough financial support to stay healthy, give back, and enjoy increased travel days.
Early on in my career, as I prepared to go on vacation, a gentleman said to me, “Just remember, when you’re thinking about vacation and planning for it, take half the clothes and twice the money.” I know you’ve heard that one before, but stay with me. Even when you carefully plan your vacation and expect it to go one way, it almost always works out another way. You either take too many clothes, don’t bring enough money, or a combination of both.
If you’re in reinvention mode — otherwise known as pre-retirement — you may want to take time to anticipate what the future holds, or how much people over 65 are currently spending. In fact, it might be good to know what they’re spending more on.
According to a recent report, there are three primary areas of spending for the 65 and older set:
- Healthcare – The average couple over age 65 will spend $280,000 on healthcare over their retirement lifetime. Obviously, that’s likely more than they spent prior to age sixty-five.
- Travel – Baby boomers report that they plan on traveling four to five times per year; considerably more than they did prior to retirement.
- Charitable giving — A full 65% of people over age 65 are giving to charity and are giving 80% more in donations versus 60% on average for those under sixty-five.
As you look at the things that will change after you reinvent yourself, consider that while spending in other areas may go down, expenditures in healthcare, travel, and charitable giving are likely to increase.
When we conduct planning for retirement, we tend to do so conservatively. That is, we keep expenses the same (even those that typically decrease) to make certain you’ll have enough money to fund your lifestyle for as long as you live. So, think about that — twice the money, half the clothes — and consider how this relates to reinventing yourself in the future. Until next time, enjoy.
Gary Klaben is in our Glenview, IL office and serves our clients who are now located all over the country. He has over 30 years of experience and is the author of Changing the Conversation, Wealth of Everything and co-author of The Business Battlefield. Whether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.
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