Opinion – Grain in Grain: What should happen to your retirement costs?

Should your retirement costs go up or down? When asked this question, most respond that monthly expenses are lower during retirement. The initial logic for this interpretation is that in retirement, the cost of children would usually be eliminated and you would have a more frugal life. In fact, spending on children is usually eliminated in retirement, but others go up.

Many financial planners argue that costs during retirement would drop to 80% or even 70% of normal living expenses. Often justify that you would have a more frugal life.

I do not believe in this natural fall or option for frugality. Most of the time the cost falls out of necessity and not desire.

The forced fall occurs because, usually, the income of those who retire falls. The reason for the drop in income you already know, but you put off your solution.

It resides in a lower cost planning wrong, or even not having carried out any planning at all. So, in retirement, your income drops and you are forced to lower your standard of living.

It is possible to list several costs that increase when you reach maturity. Health care expenses are natural candidates.

Health insurance, medicine and related expenses would be enough to cover current expenses with your child.

To reduce this healthcare expense in the future, the best way is to invest in your healthcare today.

However, this may not even be your biggest source of expense.

One of the biggest villains when you hit retirement is something you’re short on today: time.

You’ve probably heard the saying: time is money.

These days, you barely wake up and know you have to rush to work. At work, he spends between 8 and 10 hours. Additionally, they lose between 1 and 2 hours a day commuting between work and home. When you get home tired, your willingness to go out and spend is usually low.

So, only on the weekend there is time to spend.

Research shows that average retail sales rise by up to 40% on weekends.

Now imagine if all your days were Saturday. This is what can happen during your retirement. With more time, your spending volume can increase significantly.

There is also a solution for that. Planning for retirement involves planning not only your income, but also an activity that fills the free time gap.

With time taken, your retirement costs may even remain the same as they are today. But don’t be fooled into projecting lower costs.

The main point is to plan everything as soon as possible. For time is only your ally before you retire. So, don’t waste time, start building a plan for your retirement today.

Four lessons for today:

1 – Monthly expenses do not fall into retirement;

2 – Plan your retirement so that your cost does not have to fall forcibly for a lower income;

3 – Health can be one of the biggest expenses in retirement. So if you take care of it now, you can save money in the future;

4 – Free time can be one of the biggest villains in retirement. So, schedule some routine activity that fills this gap, preventing it from being covered by expenses.

Michael Viriato is an investment advisor and founding partner of Investor’s House

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