A recent U.S. consumer expenditure survey issued by the Bureau of Labor Statistics has some surprising revealings. For example, Americans age 65 and older:
Spend 34.2% of their money on housing
If you’re an empty nester or expect to be, it may make sense to downsize so that you can take advantage of the equity that you’ve built up in your home.
Spend 16% of their money on transportation
The majority comes from the expense of buying new cars — a temptation that many retirees succumb to. If you’re nervous about making your money last through retirement, be judicious about non-essential purchases. Often, used cars will be just as efficient (and much cheaper).
Spend just 0.5% of their money on education
Retirees could improve their retired lives substantially by going back to school. As technology continues to advance, spending time in a structured learning environment could bring a richer retirement.
It’s important to figure out what you want to do in retirement and how much will it cost. So, how much will your retirement expenses will be? We will drill down to details in our next post.