What expenses were reduced or eliminated when you retired?

[Orchidflower]

Clothing expense is waaaay down. I'm loving this!

And I actually have time now to look for and use coupons...something I never did before.

 

[CuppaJoe]

House cleaning products! Last house cleaner left two years ago. They always quit just before social security rules would kick in and train the next person who usually requested different products and none of them used the stuff I bought for myself to clean. So that large stash of toxic products is saving me a fortune.

 

[chinaco]

I have roughly estimated that my expense reduction will be 11% - 13% gross salary. This does not include what I contribute to my 401k.

 

[Blackwoodt]

Plan on decreasing - No more FICA taxes
Gas, wear and tear on my car as I drive 100+ miles round trip each day.
Alcohol, for some reason I feel the urge to drink when I get home from work,
maybe it's my drive….
Wardrobe expense, no longer need to 'dress for success'.

Funny but I remember thinking a couple of years ago that I can't wait to
retire if for no other reason than I would no longer need to buy, much less
wear pantyhose. Unless you are a woman you just can't understand how
frustrating the whole pantyhose experience can be! I'm just grateful that
where I w*rk has relaxed the dress code, and it's no longer an issue.

I do have my housekeeper built in as a retirement expense, I'm not retiring
just to start cleaning floors and toilets. I plan on spending some of my newly
found free time to become a smarter consumer. Cooking healthier foods, buying
organic, using coupons, shopping for gently used items, doing things that I
just don't have the time for now to save money.

 

[Retch The Grate]

looking at everybody's list it seems like the only large changes downwards I'll see are taxes and savings. Which fits with all of my estimating, so no change to the plan.

 

[Rustic23]

I think each of us are a little different, but Taxes, are largely a function of income. Sure if your income drops by 2/3rd's then your taxes will drop. For me that is not a savings. No longer savings 50% or so of our salaries is also not a reduction in spending. Neither of these, imho, are expenses.

On the other hand, things people are mentioning like, eating out, lunches, laundry, child care, and commuting cost are real expenses that disappear. I figure all these except child care, would run $5,000 or more a year.

 

[Alan]

I think each of us are a little different, but Taxes, are largely a function of income. Sure if your income drops by 2/3rd's then your taxes will drop. For me that is not a savings. No longer savings 50% or so of our salaries is also not a reduction in spending. Neither of these, imho, are expenses.

On the other hand, things people are mentioning like, eating out, lunches, laundry, child care, and commuting cost are real expenses that disappear. I figure all these except child care, would run $5,000 or more a year.

In my case I reduced taxes in retirement by moving to a State where there is no income tax but high property taxes instead, and I no longer own property. (the sales taxes are about the same here).

I also count FICA and Medicare as taxes and once I retired I stopped paying those as well.

The life insurance provided 'free' by my company was also taxed as a perk.

 

[BUM]

Taxes! and lately divvy and interest income. Not all bad to be classed as "poor". This year total income will be low enough to allow us to move some TradIRA funds to the Roth tax free. More tax savings!

 

[Rustic23]

Alan, just a little splitting hairs here, but if you live in a property tax state, you pay property tax. You may not right a check to the tax collector, but you do pay the tax. Just like the corporate income tax the consumer through higher prices pays the bill. I will admit that is some areas you can rent cheaper than your can buy, and you may be in a market where the owner of real estate can not recoup his cost. If so that is most likely temporary. As I said, just nit picking.

 

[kramer]

I have been traveling for most of the time since I retired so I don't think my situation is relevant regarding most expenses.

But . . . my biggest expense reductions were taxes, by far. I am now living on less than I paid in just federal income taxes while working.

My #1, #2, #3, and #4 expenses while working were federal income taxes, state income taxes, rent, and then FICA/Medicare/disability taxes.

#1, #2, and #4 have gone to zero. By moving away from a high cost location my rent, #3, has decreased significantly. By not working, even the taxes that I was paying on my investment income (which I still have) dropped dramatically (capital gains and qualified dividends from about 22% to 0%, interest and regular dividends from about 35% to 0%).

 

[freebird5825]

Unreimbursed travel expenses. Per diem only went so far, and being in a different city with soooooo many good restaurants was often irresistible.
The w*rk related social functions, like luncheons, holiday parties and retirement parties (where it would be commented upon if you did not attend) were a big drain.
Professional society membership fees were self paid in my case, so all those went away.

 

[Rustic23]

Alan,
While I agree we all loose these Tax items, most of these are taken out of your check, and you have no control over them. Maybe it's just the way I budget, but I look at what I have to pay out of my take home. I had Income Tax there, but it was a sum over and above what was taken out in with holding.

 

[kyounge1956]

I am surprised not to see "mortgage payment" on anyone's list. Alan says he no longer owns property—is that true of the other responders as well? Or was the mortgage paid off before retirement?

 

[REWahoo]

? Or was the mortgage paid off before retirement?

In my case, yes, about 2 years before retiring.

 

[kramer]

I am surprised not to see "mortgage payment" on anyone's list. Alan says he no longer owns property—is that true of the other responders as well? Or was the mortgage paid off before retirement?

I have never owned a piece of property. My worldly possessions consist of about 6 boxes of stuff and a bike.

If I buy property in the future, it will almost certainly be for cash.

 

[scrabbler1]

I am surprised not to see "mortgage payment" on anyone's list. Alan says he no longer owns property—is that true of the other responders as well? Or was the mortgage paid off before retirement?

I paid off my mortgage 10 years before I retired. Having 10 years of greatly lowered expenses was very helpful in being able to retire 2 years ago.

 

[Alan]

Alan, just a little splitting hairs here, but if you live in a property tax state, you pay property tax. You may not right a check to the tax collector, but you do pay the tax. Just like the corporate income tax the consumer through higher prices pays the bill. I will admit that is some areas you can rent cheaper than your can buy, and you may be in a market where the owner of real estate can not recoup his cost. If so that is most likely temporary. As I said, just nit picking.

We were renting a 3 bed apartment where we were working, and then moved to a 3 bed apartment when we retired. The rent is $100/month higher, and talking to some folks here, they pay more in property taxes than our entire rent. I agree that we must be paying property taxes some way, but the fact is that for our personal circumstances I stopped paying State income tax and now only pay $100/month extra in rent so for us that is an expense that has gone down in retirement.

Alan,
While I agree we all loose these Tax items, most of these are taken out of your check, and you have no control over them. Maybe it's just the way I budget, but I look at what I have to pay out of my take home. I had Income Tax there, but it was a sum over and above what was taken out in with holding.

No disagreement there, and in fact if you look at my reply (post 10) you'll see that I didn't include State or Federal income taxes at all in my response as I still pay them now.

But I no longer pay SSA or Medicare. As you say, splitting hairs, but it is something that used to automatically come out of my pay check along with disability insurance, group life insurance and health insurance.

SSA
Only need 1 car now so we sold one
Gas for car (2 x daily commutes of 50 miles for me and DW)
Medicare
Retirement savings: 401k, IRAs
Gardener
Reduced auto insurance rate (based on mileage and not being used for work, plus we moved to a cheaper State and city)
Daily lunches, which I used to eat at the work cafeteria
House cleaning service eliminated. We now do it ourselves
Clothing - much reduced
Dropped my disability insurance coverages
Home insurance - downsized and moved to a cheaper State and City

 

[REWahoo]

We were renting a 3 bed apartment where we were working, and then moved to a 3 bed apartment when we retired. The rent is $100/month higher, and talking to some folks here, they pay more in property taxes than our entire rent.

Let the record show Alan ignored my repeated warnings and retired in Texas.

 

[crispus]

Auto expenses have gone down dramatically, since I was a salesman. Food expenses are down also. I cook at home making meals that last 2 or 3 days. I follow a very low carb diet and eat a lot of meat, pork, chicken, fish, and fat. I make stews that are meat based, cooking them in the slow cooker allows for cheaper cuts of meat. My golf expenses are down significantly as I quit the country club. We use the excuse of our reduced income to give less and lower valued gifts. We reduced our cell phone plan and are planning to get rid of our landline in 2011. Taxes are at a lower percentage of income as I still receive commissions on my old customers orders. We have lowered our charitable giving. We buy cheaper liquor. I use the library. However things will remain tight until we can withdrawal from our tax sheltered accounts in 3 years.

 

[Alan]

Let the record show Alan ignored my repeated warnings and retired in Texas.

That's where the kids settled. If they had settled elsewhere I'm sure we would be living close by.

If I was following your advice rather than DW's then ..... I would probably be single now

 

[REWahoo]

That's where the kids settled.

Ahhh... Another case of "The tree doesn't fall far from the acorn."

 

[Alan]

Ahhh... Another case of "The tree doesn't fall far from the acorn."

Exactly.

 

[friar1610]

I can't add much to the points that have been previously made. We live a lot cheaper day to day than we did before retirement. But a few areas have increased expenses (not so much that we mind it):
- fitness center (me) and yoga (wife) fees. Previously I went to free military gyms and she didn't do yoga.
- yard care. We now live in rural VT and I have a long (about 1/10 mile) driveway. I pay to have it snow-plowed in the winter. This past summer I decided I was sick of mowing the large (2 - 3 acre) lawn myself, so we now pay for that.

All the other savings - especially on clothes - more than make up for what I mentioned above.

 

[RAE]

Expenses that have gone down for me:
-clothes (not that I spent a lot before, but I spend very little now)
-auto insurance has gone down a little bit because of no more commute to work
- dropped life insurance
- the state I live in does not tax pension income
- food. This has gone down because I now have time to shop more carefully for items on sale, plus more time to cook good meals at home. We probably eat out less than we used to also.

Expenses that have stayed the same or gone up:
-gasoline. I thought this might go down, since I no longer commute to work daily, but as it turns out I use the truck nearly as much for other stuff, now that I have lots of time.
- travel expenses have gone up, but we knew they would. We now have time for more travel.
- recreational items in general. I find myself purchasing a few more things related to my various hobbies, but I knew that would happen also.

So, there haven't been any big surprises so far (almost one year into retirement). I could cut expenses more if I had to, but we are doing okay, so we'll probably just continue on this path for now......

 

[GregLee]

I am surprised not to see "mortgage payment" on anyone's list. Alan says he no longer owns property—is that true of the other responders as well?

After resisting buying here in Hawaii for 23 years, we finally bought a house in 1994 with a 10 year mortgage and finished paying it off, accordingly, in 2004, 6 years before we both retired last summer. I thought we needed to buy when we did, because we could no longer find a rental for less than our prospective mortgage payment. In retrospect, it would probably have been better to buy a place sooner --- but I just hated the idea of going so far in debt, when, at the beginning, we couldn't even afford a down payment.

Not saying I always made optimum decisions, nonetheless, it's a load off my mind that we don't have to worry now about having a place to live, provided we can come up with the $2350 annual property tax.