Age related money savings?

fatbeetle

From FIRECalc:

Bernicke's Reality Retirement Planning: A New Paradigm for an Old Science describes extensive research showing that most people see significant reductions in spending with age (not related to reduced assets or income).

Quoted from "ex-pat Scott" in another thread.

Would those who have taken the plunge into retirement be good enough to share how and why and how much, their spending patterns have changed since taking retirement?

Musing on it;

Savings
No need to commute, less petrol/car costs
Eating at home, more time to make and grow own food.
No "work clothes"

Expenses
More time at home means more electricity/fuel
More inclined to go out and do things
More wear and tear on hobby gear.

Your thoughts?

ex-pat_scot

My expectations:


- no mortgage costs
- no day to day child costs (mine spend their whole lives doing music, drama, dance, theatre and sports stuff, which costs hugely and racks up the miles)
- no commuting
- cheap deals (holidays out of peak season, last minute breaks, senior discounts)
- work costs (drinks and meals with the team)
- DIY rather than paying for services
- cheaper healthier home-cooked food
- less gratification spending (buying stuff as a reward for putting up with the general [EMAIL="!!!!"]!!!![/EMAIL] at work)


Additional costs:
- home minimal (mrs XPS is at home already full-time)
- travel
- endless teashop visits
- hobbies (minimal)
- stationery & printing. Can no longer use work's stuff.

ex-pat_scot

And the big one - health.


The older you get, the greater the risk of one or both being either health impaired or having care responsibilities.
These significantly curtail lifestyle and thus expenses.

Linton

In the past 17 years, 11 of which were in retirement, my expenditure graph has increased roughly in line with CPI inflation. From the graph it is impossible to deduce when I retired. This is ignoring some very large one-off purchases.

In terms of spending patterns based on a quick look through the data....

-Car running costs decreased significantly
-Food has increased more than inflation, more dining out
-Holidays continue to be very erratic, no clear trend though no obvious increase with inflation.. Though if you include the costs of running the narrowboat we bought after retirement the costs have increased significantly.
-Leisure/hobby costs have increased significantly. Though they are relatively small.
-Insurance has dropped significantly, mainly driven by moving from an old house to a new one. Car insurance has remained pretty constant (dropped in real terms)
-Household bills have increased more than inflation

Linton

ex-pat_scot wrote: »

And the big one - health.


The older you get, the greater the risk of one or both being either health impaired or having care responsibilities.
These significantly curtail lifestyle and thus expenses.

On the other hand if you are paying for home care expenses can rise significantly.

fatbeetle

Thanks people, rather heartening!

aldershot

stationery & printing. Can no longer use work's stuff.

i remember a lovely early retirement quote. "It's the small things I miss the most: pens, paperclips, post-it notes...."

Sjmb

You might have save on the cost of your own children, but you may find that some of these are replaced by any grandchildren, especially if you are providing care for them whilst their parents are at work....... activities, food, pocket money and not forgetting the additional wine and paracetamol that you will consume at the end of each day!

ibizafan_2

We are spending a LOT more on holidays, not being restricted to limited time off work. We are trying to do a lot of long haul travelling while we are still in our early 60's, because you just don't know what's around the corner. Actually, our outgoings haven't changed much at all, apart from less petrol. The house has been mortgage free for 16 years anyway, so no savings to be made there. So, we are spending more in retirement than when we were in work, so thank goodness for savings and investments. But that's what we saved up and planned for.

Alice_Holt

And:

No Pension contributions;
Plus - if you do continue some paid work after 65, no NI payments.

If you volunteer for a charity, you may be able to reclaim travelling costs and expenses.

AnotherJoe

ibizafan wrote: »

We are spending a LOT more on holidays, not being restricted to limited time off work. We are trying to do a lot of long haul travelling while we are still in our early 60's, because you just don't know what's around the corner. Actually, our outgoings haven't changed much at all, apart from less petrol. The house has been mortgage free for 16 years anyway, so no savings to be made there. So, we are spending more in retirement than when we were in work, so thank goodness for savings and investments. But that's what we saved up and planned for.

My expectation is the same, eg the main thing preventing me spending money at the moment is time, eg yes holidays may be half priced if i take a last minute one, but at the moment i'm restricted how much time i have for that as my boss prefers I'm at work occasionally.

Next year that wont be the case so I could go on a last minute half price holiday every week of the year. And since the kids have gone and I haven't been restricted to school holidays, my holidays are anyway not as expensive as they used to be. Flights booked out of school holidays season and in sales, hotels / apartments not much different.

Even on a "retirement day" I might walk into town or nature park and eat at a cafe which will be more expensive than commuting into work and eating in a subsidized restaurant.

Commute my expenses wont change as I have trivial expenses for that, work suits I dont spend a lot anyway, mortgage already paid off, kids flown the nest, so those expenditures dropped a few years back.

The best cost saving measure for me might be a part time job, not for the income but just to prevent me spending !

I think age / health will be the deciding factor not retirement, I really dont get where this expectation that your spending drops off a cliff when you retire which is what a lot of articles state. When you read the reasons why they say, a lot of them are unconnected with retirement. Kids left house, no mortgage and so on.

I wont be paying into a pension of course (apart from the £2880) but then i dont count that as 'spending' anyway, if i look at my salary after deductions, thats what i will be comparing my spending needs after retirement with so my pension doesn't come into play in how much money i will have.