This post 5 Things You're Probably Spending Too Much On? appeared first on Daily Reckoning.

When planning on how much to save for retirement, you first need to know how much you'll spend.

The general rule is that you'll need 70% to 80% of your pre-retirement income to maintain your standard of living.

However, a recent study found that nearly two in five (39%) retirees are spending more than they had expected.

With that in mind, there are at least five things you might spend more on once you retire.

#1?Travel

Many retirees love to travel, especially on the kind of trips they could only dream about while working.

Cruises are a favorite. In fact, the majority (38%) of cruisers are baby boomers and 47% of them plan on booking another cruise. Furthermore, the average age of those take cruises lasting 16 days or longer is 58.

And they're big ticket items…

Fares advertised for less than $75 per person per day, say to the Caribbean, are enticing.

But it can run double or triple that amount depending on the cabin you book, your drinking preferences, the number of spa visits, how many shore excursions you take, and whether you are a big shopper at the gift store. Gambling can shoot your tab to the moon.

To keep the price of your cruise under control, realize that the mass-market lines with the lowest prices include buffet meals and entertainment? not much more. They're also the ones who are notorious for pushing all the extras.

And don't forget the cost of getting to and from the ship.

So before booking your cruise make a plan:

· Estimate how much the trip will cost.

· Calculate the amount you need to set aside each month so you won't have to run up credit card debt to finance the trip.

· Stick with your cost estimate while on the trip. Don't succumb to pressure to buy extras that were not in your budget.

#2?Healthcare

As we age, our health changes.

According to the Employee Benefit Research Institute, the average annual out-of-pocket health care cost for households ages 85 and above represents 19% of total household expenses. Between ages 65-74 it accounted for 11%. Preretirement it was 8%.

Some costs are predictable, others are not.

• The predictable ones include:
• Regular doctor visits
• Dental cleaning and exams
• Ongoing prescription medications
• Eye glasses

Examples of those that can come out of nowhere and have a higher probability of occurring as you age:

• Extensive dental procedures
• Emergency room visits
• Overnight hospital stays
• In-home health care
• Nursing home stays

And even if you're on Medicare, there are a slew of items not covered, such as long-term care, most dental care, vision care, and hearing aids. Plus there are deductibles and copayments for doctors' services and outpatient care.

So you need to have separate preparations for each.

Medicare Advantage and Medigap plans can fill some of those holes. There are also supplemental policies you can buy that cover dental, vision, and long-term care.

Another option is to sign up for a health savings account (HSA). To qualify, you must have a health insurance policy with a deductible of at least $1,350 for single coverage or $2,700 for family coverage. You can contribute up to $3,500 for a single or $7,000 for a family. Plus another $1,000 if you're at least 55.

Moreover, the contributions are excluded from your taxable gross income.

With an HSA you withdraw funds tax-free for medical, dental, and other out-of-pocket expenses at any age. However, you can't make new contributions to the account after you enroll in Medicare.

#3?Recreation

With spare time on your hands and the possibility of health issues down the road, you may be inclined to become more physically active. And the fitness industry is quick to accommodate you with gym options aimed at retirees.

To spot a retiree-friendly gym see if they have:

• Classes specifically for seniors
• Equipment that's easy for older folks to use
• Personal trainers for seniors
• Discounts for seniors. Many nationwide gyms partner with AARP or AAA to offer discounted plans for seniors.

If you have a Medicare Advantage or Supplement plan, you might also check to see if it covers enrollment at your local SilverSneakers gym.

A YMCA is another option. Many have an Active Older Adults program that includes senior fitness routines.

Or you can visit your community center. Classes are very affordable, and some are held in parks to get you out in the sun and fresh air.

#4?Utilities

Once you retire, you'll likely spend more time at home. That means you'll use your TV, air-conditioning, heating, and other energy hogs more, too.

Here are some quick and effective ways to trim those costs:

• Limit the time you run your pool pump to six hours a day in the summer and four hours in the winter
• Cool your home at 78 degrees or higher with the thermostat fan switched to auto. Bump it to 82 degrees or higher when you're away.
• Heat your home at 68 degrees or lower with the thermostat fan set on auto. And drop it to 65 or lower at night or when you're away.
• Reduce your water heater temperature to 120 degrees and save about $2 per month.
• Clean or replace A/C filters regularly.
• Turn off the ceiling fan when you leave a room. That could save you up to $7 a month.
• Replace old, high-flow showerheads with water-efficient ones and save up to $80 per year.
• Match the water level on your washing machine to the load size. Also use cold water when possible.
• Clean the lint filter in your dryer before every load.

#5?Downsizing

The concept of going from a big home with loads of space you're no longer using to a modestly-sized condo or house in an adult community sounds inviting.

But there are hidden costs?

First, making your home marketable.That means taking care of all that deferred maintenance you've put off for years. And to get it done in a timely fashion, it might be worth spending the money for professionals to tackle those tasks.

Second, up to 20% in capital gains tax.You can exclude up to $500,000 of profit when you sell your home if you're married filing jointly. That drops to $250,000 if you're single.

Third, the actual move.Unless you want to rent a box truck and do the backbreaking lifting yourself, you should hire a moving company. Depending on the distance you're moving and how much stuff you have, a full service moving company will charge $10,000 or more.

The priciest times are in the summer when kids are out of school. So try to time your move during the winter, and you might save a few bucks.

And use this opportunity to get rid of stuff you'll never use [link to the article we wrote on death cleaning]. You'll save money on moving fees and feel a sense of accomplishment.

Fourth, it could cost more to live at your new location.For instance, real estate taxes could jump, even if the value stays the same. Your current home is taxed based on its assessed value. Whereas your new home's tax is based on the purchase price. So be sure to review taxes when considering downsizing.

There might be HOA or club membership fees that you don't have now. Food, restaurants, and auto insurance could cost more.

To sum it up, chances are your spending will fluctuate throughout retirement. And how much you spend will have a big impact on how well you live during those years.

But if you recognize which expenses can increase and how to control them, you'll be better prepared when they pop up.

To a richer life,

? Nilus Mattive
Editor, The Rich Life Roadmap

The post 5 Things You're Probably Spending Too Much On? appeared first on Daily Reckoning.