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The average American 65 years of age and up earns an annual pre-tax income of $55,335, and that same group spends $52,141 yearly, or $4,345 a month, according to the Bureau of Labor Statistics (BLS).
That income doesn’t leave a lot of extra cash for unexpected expenses or emergencies. The average American aged 65-69 has about $200,000 in retirement savings, according to an analysis of Federal Reserve data, and might still need to work even when they reach retirement age. High expenses often play a role.
These four categories of spending tend to eat into monthly expenses — here’s how you can shave some zeros off them.
Home costs represent the largest expense for retirees, accounting for 36% of their annual expenses, BLS figures show. Retirees who want to gain a leg up may want to consider downsizing as house prices remain high.
That could mean selling your current home for a profit, relocating to a less expensive market or seeking out cooperative living situations with other retired couples.
If you’re keen on staying where you are, you can make living there less expensive by getting the best deal on home insurance.
OfficialHomeInsurance's digital insurance marketplace compiles the best home insurance rates for your unique needs. In just two minutes OfficialHomeInsurance will round up a list of offers from leading insurers, potentially saving you saving you an average of $482 a year.
If you aren’t working as much – or at all – you might want to swap the car for public transit or a bicycle. Transportation is the second-largest spending category, making up $7,160 in annual expenses for retirees, according to BLS figures.
If your partner has a car, consider getting rid of one vehicle to cut costs. Even if you own your auto outright, car insurance, maintenance and repair costs for two cars add up.
Whether you keep multiple cars or just have one, you want to make sure you’re not overpaying for car insurance.
BestMoney is a website that compares car insurance quotes from multiple companies and narrows down the best auto insurance rates in your area.
All you have to do is answer a few quick questions, and BestMoney will consolidate your top offers all in one place, making it easy to find and select the right one for you.
Read more: Jeff Bezos and Oprah Winfrey invest in this asset to keep their wealth safe — you may want to do the same in 2024
At $6,490, food expenditures account for over 12% of annual expenses for those 65 and over. Meal planning is one way to avoid overspending since it involves shopping for food items instead of regularly eating out — which can be an expensive habit.
Stick to your grocery list when you shop. Try using two tricks many veteran shoppers employ: never shop on an empty stomach and buy mostly (or exclusively) items on sale. Upscale markets tend to have higher prices, while chain supermarkets often offer the same high-quality organic items at far more reasonable prices.
Of course, while you can adjust your grocery budget, you still need to eat. But you can make the most of your essential food spending by setting aside some money when you make a grocery trip.
Acorns is an easy-to-use, automated savings platform that allows you to invest your spare change without thinking twice about it. They offer different membership options for all levels of investors, so you can choose the option that best supports your financial goals.
After getting set up, you just spend as you normally would. Acorns will round up your purchases to the nearest dollar and put the remaining change into a smart investment portfolio. Before you know it, your meal ingredients will become ingredients in a diverse investment portfolio.
Health spending makes up $7,030 in annual spending for retirees. One way to cut costs when health issues arise is to get easily affordable preventative care. That means staying up to date on screenings and vaccinations.
It’s also a good call to set aside an emergency fund should any immediate health issues come up. By putting these savings in a high-yield savings account, they can grow to their full potential and save you in a dire situation.
A high-yield savings account could deliver returns of over 4%, while the U.S. Bank's standard savings APY is 0.01%.
For a streamlined look at what high-yield savings account is best for you, you can check out our guide to the Best High-Yield Savings Accounts of 2024 to see which is the right soil for your savings to grow in.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
2024-05-25T16:17:57Z dg43tfdfdgfd