Cost of Living After Retirement

For clues to how much it will cost you to live after retirement let us turn to a study made by our government in 1959. To make this study goods and services which represented a modest standard of living for a retired couple were priced in 20 American cities. The following table shows the annual cost of living for a retired couple in the city of Detroit:

ITEM ANNUAL COST
Food and beverages $ 899
Housing 1,122
Clothing 226
Medical care 298
Transportation 170
Other goods and services 381
$3,096

Thus it appears in Detroit during the Autumn 1959 that it cost approximately $258 a month to maintain a modest standard of living. The monthly cost ranged from $220 in Houston to $280 in Chicago. Undoubtedly, it costs more than these amounts at the present time.

Although these figures are of interest to older people who are preparing for retirement the fact remains that peoples’ needs and desires differ considerably. Hence, in the last analysis, each older person has the task of estimating what it will cost him to live after retirement. How can this be accomplished?

Your present cost of living before retirement is probably the best place to start. If, as we suggested, you have kept a record of your expenditures for one or more months, you will have the information you need to make an estimate of your future situation.

Let us suppose on the basis of your record keeping that you know how much a month you usually spend for l)Food, 2)Housing, 3)Clothing, 4)Medical Care & Dental care and 5)other expenses. In estimating your future cost of living you should look over each one of these expenditures and ask yourself these questions: After retirement will I spend more or less for each one of these kinds of items? How much more or less?