7 Expenses That Disappear in Retirement

Your golden years may not cost as much as you fear.

Selena Maranjian
Selena Maranjian
Oct 13, 2010 at 12:00AM

Retirement costs aren't always as scary as they sound. Sure, your health care bill likely won't get any smaller (at least, not as long as you're breathing), but many other expenses will either shrink or disappear entirely. Take a deep breath, relax, and meet the costs you can kiss goodbye in your golden years.

1. Clothing
The average U.S. household spent $1,725 on apparel and related services in 2009, according to a Bureau of Labor Statistics survey. When you're not working, you won't need to buy suits or work clothes, or dry-clean them regularly.

2. Food
You won't be buying lunch or snacks at work, and the daily $3 coffee from that vendor on your way to work might be replaced by a $0.50 coffee made at home. Households spent $2,619 on eating out in 2009, but you'll have the time to spend less if you want.

3. Transportation
Getting from point A to point B represents a surprisingly big chunk of our spending -- $7,658 spent per household, on average, in 2009. Retirees bypass much of that by no longer commuting to work. You'll save on gas, vehicle upkeep, tolls, and parking. Even if you take a bus or train to work, that expense will vanish. You might even be able to give up a vehicle, saving on gas, insurance, and maintenance.

4. Professional costs
Bid farewell to all of the expenses related to your profession, such as dues, memberships, subscriptions, and licenses. Some auto workers pay close to $1,000 annually in union dues, for example, while lawyers in California face a $410 annual bar fee. Many public school teachers pay annual dues between $500 and $1,000. Not paying these costs will free up a lot of money for you.

5. Housing
Many retirees downsize into a smaller home, while others move to an entirely new state or town with a lower cost of living. A smaller home will cost less to buy, heat, cool, insure, maintain, and pay taxes on.

6. Taxes
Much of your paycheck has gone toward saving for retirement and paying income and payroll taxes. With less income, your tax bills should drop significantly. And if you've been saving a decent chunk of your take-home pay, you shouldn't need your full salary to get by in retirement.

7. Everyday expenses
Many of the fun things you already enjoy will cost a lot less, thanks to discounts available for senior citizens. You can catch matinee movie for less, or possibly enjoy lower fees at your golf course. You can travel at off-peak times to grab lower fares, and you may qualify for discounts at restaurants and stores, too. Some towns even offer property-tax reductions for retirees.

While many people assume that travel and entertainment expenses will surge in retirement, that's not necessarily true. New retirees often enjoy a lot of long-deferred traveling in their first few years, but after that they taper off. As they move from their mid-60s into their mid- to late 70s, many will slow down and stay home more.

Plan ahead
Don't leave your retirement up to chance. Take some time to estimate how much money you'll need, and how you'll amass it. In the process, consider factors such as those above (along with any others that apply to your life). There's no way to know exactly how much you'll need for most expense categories, but making a few educated guesses will let you see your big picture more clearly.

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Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. The Motley Fool is Fools writing for Fools.