![]() Also calculate how much you’ll spend on transportation each month, including gas and insurance if you own a car, or public transportation if you don’t. First, paint a realistic picture of how much you’ll spend on housing, whether it’s rent, a mortgage or just the property tax and homeowners insurance on a place you own. To decide how your own costs will compare to the overall average spending in retirement amounts, it can help to set a budget. If there are two of you, it’s also important to consider retirement plan cost since you’ll be saving for retirement as a couple and paying fees and taxes on the entire amount. ![]() Other factors that will increase the average cost of retirement are things like vacations, dining out and entertainment expenses. This doesn’t include the cost of senior living or nursing home care, if that becomes necessary. Experts estimate a couple will need $280,000 just to cover health care and medical costs over the course of retirement. However, other expenses will increase to make up for it. You’ll both share a home, so you may be able to save on housing costs. But if you’re both retired, it will be more difficult to live comfortably unless you have substantial savings, or you significantly reduce your monthly expenses. If you’re married and your spouse is still working, your retirement will reduce your monthly household income significantly less than if you lived alone and had to take on the brunt of the expenses yourself. When you’re considering average spending in retirement, one of the biggest variables will be whether you’re living solo or with someone. On average, you can expect to pay $1,500 to $6,000 a month for such an arrangement, plus the cost of any care you may need. It can be even more if you move into an assisted living facility. ![]() If you choose to move to a senior living community to be around others your own age, you may find yourself paying more than you do now, especially when you factor in homeowners association fees. Many choose to move to a smaller place or a warmer climate to enjoy their golden years. That assumes you will own a home at retirement. If you go by the average, though, you can expect to pay just under $300 a month for your home, even if it’s fully paid off. ![]() For homeowners insurance, the average yearly cost is $1,083, which divides up to only $90 a month, but again, the cost can vary widely depending on where you live and the value of your home and other belongings. On average, Americans pay $2,127 each year in property taxes, which averages out to just over $177 a month, but this differs from one area of the country to the next. ![]() But even if you own your house, you’ll still be tasked with paying homeowners insurance and property taxes. If you can pay off your home well in advance of leaving the workforce and stay in that home after retirement, you’ll be able to reduce your monthly costs significantly. One thing that helps retired couples is the lack of rent or a mortgage payment. But you can still estimate and assume the amount you’ll have coming in will make up for the increase. Of course, if you’re in your 20s and just starting out, inflation will push those costs up significantly by the time you get to retirement. You can very easily estimate the amount you’ll need to live on in retirement based on your own current costs. When you look at the monthly average for all households, it’s about $1,000 more, so if you want to go by that data, that means you’ll need $1,000 less per month than you’re spending now. According to the Bureau of Labor Statistics, in 2016, households run by those age 65 and older spent an average of $45,756 per year. ![]()
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