11 Expenses That Almost Totally Disappear When You Retire

Your retirement budget might get a lot easier when you think about these costs you may no longer have.
Updated April 27, 2023
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Retirement planning can make you nervous when you realize that you won’t have a steady paycheck deposited into your checking account regularly. However, you might be surprised to find that you're able to keep more money in your bank account than you think when you retire. 

When you’re creating an estimated retirement budget, you may breathe easier knowing which costs may diminish or disappear when you’re no longer working. So celebrate these expenses that may not be a burden when you retire.

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Commuting costs

Syda Productions/Adobe Older couple driving car

You may be working full-time in an office or commuting a few times a week with an office/home hybrid work environment. But you won’t have to worry about that commute when you retire.

If you have a monthly fare pass on a commuter rail line, say good-bye to that expense. If you drive your car to work, look at the money you can save by not having to pay for gas or maintenance and repair to your vehicles. 

You also might want to check with your provider about saving money on car insurance if you aren’t putting as many miles on your car.

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Payroll taxes

fizkes/Adobe woman sits on sofa sorts out household bills

It can be disheartening to see how much is taken out of your paycheck each time for payroll taxes. And each time, you just have to remind yourself that contributions are for Medicare and Social Security, which will come back to you later as retirement benefits.

When you stop working, you won’t have to pay those taxes unless you continue working part-time when you retire. However, if you’re self-employed and collecting Social Security, you will have to pay FICA taxes.

Family costs

Jesse B/peopleimages.com/Adobe grandparents helping children

Kids can be a great addition to your life, but they also cost money. According to the Brookings Institution, the cost of raising a child to adulthood is $300,000. You have to pay for basics like food and clothing as well as potentially big-ticket items like education or a car.

But just as you have grown older and are planning to retire, your kids have aged into adulthood. They can live independently and pay for their own needs without your help, freeing up cash in your monthly budget.


gstockstudio/Adobe man putting a signature

If you can, try to pay off all your debt before you retire, especially high-interest debt like credit cards. But paying off a lower-rate debt like your mortgage can also help your retirement cash flow.

Think about paying off your home while you’re still working and have the income to do so. Then you can wipe that major monthly expense from your budget when you’re retired. 

However, you may still have a monthly homeowners’ association fee where you live and you will have property taxes, so your housing cost won’t completely disappear.

Senior discounts to reduce expenses

denis_vermenko/Adobe woman holding mobile phone seeing crazy discounts

You may not enjoy getting old for some reasons, however, there are some perks.  For one, seniors may be wasting money on goods and services because they didn’t ask for the senior discount rate. There are senior discounts on movies and entertainment, groceries, travel, and many other expenses.

An AARP membership also offers special discounts. While an AARP membership does have an annual cost, the discounts and reduced rates a membership brings may make it worthwhile.

But beyond the small expenses, you should look for ways to reduce bigger expenses. Evaluate your car insurance when you retire. You may be able to lower your rate because you’re driving fewer miles annually or by taking a defensive driving course.

Retirement contributions

Fabio/Adobe mature man sitting at table talking on cellphone

You may have been dismayed each month to see cash pulled out of your paycheck for retirement contributions, even though you knew it was for a good cause. But once you retire, you don’t have to worry about continuing to contribute to your retirement funds.

Enjoy spending the money you worked so hard to save when you had a job. And remember that one of your new “jobs” in retirement will be to manage your investments to keep your money working for you.

Retirement withdrawals (and taxes)

Andrii Zastrozhnov/Adobe upset senior woman reading mail or bill at table

Taking money out of your retirement accounts to pay your monthly bills is a shock for most people. And the next blow is having to pay taxes on the withdrawals from your 401(k) and traditional IRA accounts.

You may be able to minimize the impact of withdrawals by choosing the best age to start receiving Social Security benefits. The longer you wait to claim Social Security, the more money you will receive.

You may be surprised to find that many of your monthly living expenses can be covered by your Social Security payment. This will allow you to keep more money in your retirement accounts until you reach the mandatory required minimum distribution (RMD) age.

Life insurance

eric/Adobe agent selling life insurance to senior couple

Life insurance is necessary when you have a family, a mortgage, and children to support. If something were to happen to you, a life insurance policy could keep your family from having to deal with a major lifestyle upheaval in addition to losing a parent and spouse.

As you head toward retirement, your kids may be grown and independent and your spouse will be able to live with your retirement investments if something happens to you. If that’s your situation, you can ditch those premiums when you retire.

Work clothes

bobex73/Adobe senior woman and her grandchild working in the garden

You may work in a professional setting that requires you to wear nice dress clothes or a suit. You could also be out in the field and need good work boots or jackets and pants that can take a beating.

Those items are expensive to buy and maintain, but you don’t have to worry about them when you retire. You’ll spend less to buy more casual attire that can easily be thrown into the washer and dryer instead of making weekly visits to a dry cleaner. And you probably already own plenty of weekend clothes.

Food and drink

N Lawrenson/peopleimages.com/Adobe senior man smiling while pressing arms on kitchen table

You probably don’t pack your lunch for work every day, which means there are days when you have to spend money to eat out for lunch. You also may go to a local coffee shop for breakfast or a pick-me-up in the afternoon.

But you can cut out those costs when you retire. Instead, make your coffee at home each morning for a fraction of the cost and find cheap deals on lunch foods that will cost less than typical meals at work.

Professional costs

littlewolf1989/Adobe man showing his commercial driver license

You may pay yearly licensing fees for your profession in your state or have to pay for additional training classes to stay in compliance with a license or certification. You also might have union dues or conference costs that you have to pay out of pocket.

But you don’t have to worry about training, licensing and certification, or any other professional-related costs when you retire and are no longer in the profession. So remember to factor in those costs when planning your retirement budget.

Bottom line

Andrii Zastrozhnov/Adobe married couple looks at the bills

While your cost of living may not be cut in half when you retire, there are many expenses that will go away or at least diminish. As you plan for your retirement, look at all aspects of your current lifestyle to make a realistic budget.

If you’re still worried about money coming in after you’re retired, you can find ways to make extra cash such as taking on a side hustle.

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Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.

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