Add Up These Five Costs and See How Much You’ll Save
Today’s Two-Minute Retirement Solution focuses on good news for a change… Let’s discuss some overlooked benefits of the traditional retirement lifestyle.
When you finally pull the plug on your full-time job, there are a lot of items you’ll no longer need (not just your alarm clock).
Cutting these things out of your life can help you lower your costs.
One of the biggest costs you’ll no longer face is your work commute. And this can be very expensive.
When I was working full time, I logged about 13,000 miles a year just to get to and from work. And that didn’t include trips to and from the airport for business travel, which tacked on about 160 miles round trip each time.
When you consider the toll commuting takes on your vehicle, you’ll be glad if you can finally squeeze it out of the picture!
New tires, routine maintenance and repairs, and insurance all add up. And when you factor in the depreciating value of your vehicle, it’s a heck of a lot of money.
But if you’ve played the retirement game the right way (saved aggressively and invested wisely), your golden years won’t require a work commute. So you’ll be able to say goodbye to many of those commute-related costs when you quit the rat race.
Another big expense you’ll be able to get rid of is the cost of dressing the part.
I’m talking about the costs of routinely stocking your closet with the clothing and shoes that are part of a work wardrobe.
Depending on your job and where you live, this can be a huge expense…
When I worked as a broker – and I was dressing in shirts, ties and dress slacks every day – my laundry and dry cleaning bills were huge monthly expenses.
And how about the cost of buying all those suits, dress shirts, shoes and ties? Oh my, are they expensive…
Add to that an overcoat for the winter months and separate collections of summer and winter suits… The list is endless and incredibly costly!
But my wardrobe now consists of shorts, golf shirts and a few nice things to wear in these videos.
Other costs you’ll hopefully be able to reduce or get rid of (along with your full-time job) are payroll taxes – and, heck, most of your taxes in general!
Unless you’re bringing in a lot of taxable money, your total tax bill in retirement should be a small fraction of what it is now.
Money that you used to set aside for retirement savings may go out the window, too. And unless you have taxable income from work, that’ll probably mean no IRA or 401(k) contributions either. (I hope you have been putting money aside.)
You may be able to reduce or get rid of your expenses related to life insurance policies and disability coverage, too. At some point, most of us won’t need either one.
You may still have a small-term life policy if you’re carrying a mortgage, which isn’t a bad idea – if it isn’t crazy expensive. But a lot depends on your health.
And if you’ve been paying into a whole life policy, in most cases, you can actually take the cash value out of it.
The bottom line is you should add it up and see which costs you’ll be able to reduce or erase entirely. I promise, you’ll be surprised by what you don’t have to spend just to work!
But greens fees and traveling will make up the difference if you’re not careful. So watch your spending there.
Make sure you look at your whole cost structure before you make the leap to sleeping late.