5 Expenses That Vanish During Retirement

What's Hot

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

How a Mexican Tariff Will Boost the Cost of 6 Common PurchasesFamily

This Free Software Brings Old Laptops Back to LifeMore

How to Protect Yourself From the ‘Can You Hear Me?’ Phone ScamFamily

Report: Walmart to Begin Selling CarsCars

Where to Sell Your Stuff for Top DollarAround The House

Is Your TV Tracking You? Here’s How to Tell — and Prevent ItAround The House

11 Staging Tips to Help You Get Top Dollar When Selling Your HomeAround The House

8 Tuition-Free U.S. CollegesCollege

4 Car Insurers That Might Raise Rates Even When the Accident Wasn’t Your FaultCars

21 Restaurants Offering Free Food Right NowSaving Money

20 Simple Hacks to Make Your Stuff Last LongerAround The House

Trump Scraps FHA Rate Cut — What Does It Mean for You?Borrow

How to Invest If Trump Kills the ‘Fiduciary Rule’Grow

12 Surprising Ways to Wreck Your Credit ScoreBorrow

10 Overlooked Expenses That Ruin Your BudgetFamily

A few key costs disappear once you quit the 9-to-5 grind. Find out more.

Everybody dreams of the day they can stop working for good. But worries about finances can cloud the sunniest visions of retirement. How will you cover daily expenses when you no longer can count on a regular paycheck?

Fortunately, there are a few costs that disappear once you quit the rat race. Following are five expenses that vanish during retirement.

1. Commuting costs

Kichigin / Shutterstock.comKichigin / Shutterstock.com

The daily grind can wear away at a worker’s wallet. In fact, the average American worker spends $2,600 annually on commuting costs, according to 2015 survey commissioned by Citibank. And that number has been rising, with 60 percent of workers in the survey saying their costs had risen in the previous five years.

When you exit the workforce, much of the money you otherwise would have spent on getting to and from work will remain in your pocket.

2. Payroll taxes

Andrey_Popov / Shutterstock.comAndrey_Popov / Shutterstock.com

A paycheck is a beautiful thing – but it is often less pretty than it appears on the surface. Payroll taxes siphon 6.2 percent of your salary for Social Security, and 1.45 percent more for Medicare.

If you earn big bucks, you stop paying taxes for Social Security on any amount you earn above $118,500. But there is no limit on how much of your income is subject to Medicare tax. In addition, a provision in the Affordable Care Act requires individuals who earn $200,000 or more and couples who make $250,000 or more to pay an additional 0.9 percent on amounts over those thresholds.

The situation is even more grim if you are self-employed. Instead of splitting payroll taxes with your employer — 7.65 percent paid by you, 7.65 percent paid by your company — you are on the hook for the full 15.3 percent.

Fortunately, once your job disappears, so does your obligation to fork over payroll taxes.

3. Saving for retirement

Andrey_Popov / Shutterstock.comAndrey_Popov / Shutterstock.com

Millions of American workers desperately pinch pennies so they can save money for retirement, often in a tax-advantaged investment account such as a 401(k) or an IRA.

But once you stop earning income, you can start reaping the benefits of all those years of saving for “the future.” Instead of contributing to your retirement accounts, you will be withdrawing from them. That means you no longer will have the “expense” of contributing up to $18,000 for a 401(k), or $5,500 for an IRA. Add those amounts don’t even include catch-up contributions for those who are age 50 and older.

4. Life insurance and disability insurance

wavebreakmedia / Shutterstock.comwavebreakmedia / Shutterstock.com

Typically, workers purchase life insurance to protect their families in the event that the worker dies and leaves loved ones without income. Similarly, disability insurance is there to replace a worker’s income should he or she become ill or injured and unable to work.

But if you are retiring from work, chances are good that you plan to live off of savings, investments and Social Security. In other words, if you have enough money to retire, you probably no longer need to insure your income.

While these policies can still make sense for some retirees, others can say “so long” to these forms of insurance — and their associated costs.

5. Clothing


The average U.S. household spent $1,846 on apparel and related services in 2015. Chances are good that in many homes, a large percentage of that budget went toward work-related clothing.

When you finally retire, you can trade in those fancy suits and sheaths for T-shirts and jeans. And as your wardrobe becomes more modest, your apparel costs likely will follow suit.

What other expenses can you think of that disappear in retirement? Let us know by commenting below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 8 Ways to Get Your FICO Score for Free

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,882 more deals!