The surest path to a secure retirement is to have your spending habits match your income
“You can be young without money but you can’t be old without it .” — Tennessee Williams
A secure retirement will likely be the result of how well you manage your spending habits during retirement. Many retirees focus on their retirement income and forget to keep an eye on spending until the two no longer match up.
How are baby boomers spending their retirement income?
Related: What worries Baby Boomers the most?
Dr. Wade Pfau, the Retirement Researcher, recently shared some data about senior spending habits that are certainly eye openers.
WHAT TYPE OF RETIREMENT SPENDER WILL YOU BE?
Foodies – 39% of Retirees
– Fairly frugal in retirement, with the lowest overall spending.
– 28% of expenditures are on food and beverages, including purchases at large box stores or online retailers.
– Tend to have lower housing expenditures as they have paid off their mortgage and have limited property taxes.
– Tend to spend less as they age.
– Should separately account for health expenditures, but can otherwise reasonably plan for their spending to decrease as they continue through retirement.
Homebodies – 29% of Retirees
– Tend to spend more on housing than others.
– May still have a mortgage, but even homebodies without mortgages have significant expenses for property taxes, ongoing maintenance, repairs, furnishings, and utilities.
– As homebodies age, they may require greater expenditures on home maintenance and chores for activities they are no longer able to manage on the own.
– Should make clear plans about future housing: When will the mortgage be paid? Is there a second home that may be sold? What portion of the budget consists of property taxes and utility bills? What are future plans for downsizing or further renovating the home?
Related: The Hidden Cost of Retirement
Globetrotters – 5% of Retirees
– Spends more on travel and has the highest overall expenditures of any category.
– Represent 11% to 13% of households with at least $1 million of investment assets.
Health Care Spenders – 4% of Retirees
– Health care expenditures reflect 28% of income (Medicare-related expenses and prescription costs).
The type of spender you are will determine the quality of your retirement
No matter what type of “spender” you will be, having a Reverse Mortgage as a safety net can make the difference between a secure retirement and a retirement where you’re scrambling to make ends meet.
Related: Create your own retirement paycheck
The New Reverse Mortgage isn’t for everyone…but it could be!
If you’re still wondering if The New Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.