Saving money when you retire

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Farm Forum

Many places explain that you will need 80 percent of your income after retirement. So how do you get to that figure? Some of that will be easy as many expenses will be reduced after you retire. But everyone’s situation is different.

You will no longer be tied down with work-related expenses. The first would be from commuting. You no longer have the cost of gas, car maintenance, parking fees, mileage depreciation on your car, and possibly you could lower your car insurance if you drive under a certain amount of miles per year.

You will no longer need certain clothes for your job, whether they were uniforms, professional dress, or other. Plus you will no longer need shoes for every occasion. You will be able to reduce your lunch out budget, and can make your own coffee at home now. These expenses may not seem like a lot, but they all add up to a large amount each year.

With the extra time on your hands in retirement you will have more time to cook, so the price you used to pay for convenience foods could go down. Use your time wisely to save money.

You spend a lot less after your kids are out of school and moved out on their own. Often this coincides with retirement. You are no longer paying for their groceries, school expenses, an extra car, or other expenses. If you currently live in a large house you may want to downsize to a smaller home with less maintenance, or even relocate to an area with lower living expenses.

Take advantage of the senior discounts that are available for movies, state parks, fast food, travel, and others that are offered. You can also check out the community offerings that are available during the day since you are no longer at your job during those times.

Many times people drop into a lower tax bracket, which means your income will be taxed at a lower rate. It takes a lot of money to retire, but with a revised spending plan or budget after retirement you may find that some expenses are less and you will not have to adversely affect your lifestyle.

Reach Karen Slunecka at 605-626-2870 or karen.slunecka@sdstate.edu.