Many retirees enter retirement with a carefully planned spending strategy yet still find their monthly withdrawals creeping higher.<\/p>\n
Read More: 8 Things To Stop Doing After 60, According To Kevin Lum<\/a>\u00a0<\/p>\n Find Out: 8\u00a0Clever Ways Retirees Are Earning Up To $1K per Month From Home<\/a>\u00a0<\/p>\n Financial planners say the cause is a number of small upgrades that quietly increase your monthly spend, what Kevin Marshall, CPA, personal finance professional at Amortization Calculator<\/a>, called \u201cretirement<\/a> budget drift.\u201d<\/p>\n Andrew Latham, CFP, content director at SuperMoney<\/a>, described it as \u201cthat slow, sneaky increase in your monthly spending that happens without any single big decision to blame.\u201d<\/p>\n Here are some small upgrades to keep an eye on<\/a>.<\/p>\n 1. Dining Out More Often <\/p>\n Of all expenses, \u201cthe number one offender\u201d in retirement is dining out, Latham said. \u201cWhen every day feels like Saturday, you eat out like it\u2019s the weekend,\u201d he said.<\/p>\n It\u2019s easy to fall into a habit of convenience, but it comes at a steep cost, he warned.<\/p>\n Check Out: Warren Buffett\u2019s Advice To Prepare for a Recession Is S-Tier<\/a>\u00a0<\/p>\n 2. Subscription and Streaming Creep <\/p>\n It\u2019s also easy to accumulate subscriptions<\/a> in retirement without realizing how quickly the costs accumulate, Latham said.<\/p>\n These recurring expenses often go unnoticed because they are automated. They seem harmless at first, Marshall added, but every little thing adds up: another trip, upgrading your phone, one additional streaming service or meal out.<\/p>\n \u201cIf you add several of these, you could be spending $300 or more extra each month,\u201d he said.<\/p>\n 3. Convenience Services and Lifestyle Upgrades <\/p>\n Retirement also creates opportunities for convenience upgrades<\/a>. Services such as grocery delivery, home cleaning or lawn care can gradually become part of a retiree\u2019s routine, Latham said.<\/p>\n \u201cYou sign up for a meal kit delivery, add a premium gym membership, upgrade your phone plan, subscribe to two new streaming services and hire someone to mow the lawn,\u201d he said.<\/p>\n Individually, these costs are minor. But stack them up, and you\u2019re looking at $500 to $700 more per month, which is $6,000 to $8,400 extra per year that comes out of retirement savings.<\/p>\n 4. Travel, Hobbies and the \u2018Grandparent Tax\u2019 <\/p>\n Lifestyle spending often increases during the early years of retirement, when retirees have more time and energy for activities and visiting with grandchildren.<\/p>\n \u201cTravel is another big one,\u201d Latham said. \u201cEarly in retirement, people tend to book nicer hotels, fly business class for the first time or tack on extra days to trips because they don\u2019t have to rush back to the office.\u201d<\/p>\n Other spending increases can come from family activities. \u201cAnd then there\u2019s the grandparent tax. I\u2019ve watched people quietly blow through thousands a year on gifts, experiences and trips with grandkids,\u201d he said.<\/p>\n Why Budget Drift Is Hard To Notice <\/p>\n One reason retirement spending<\/a> increases often go unnoticed is retirees check their investments regularly, but very few do a monthly spending audit, Latham said.<\/p>\n By the time retirees notice the change, the pattern may already be established. Fortunately, there\u2019s an easy fix. \u201cAll that\u2019s required is that you start tracking where your money is going once a month,\u201d Marshall said.<\/p>\n Why Inflation Can Make Budget Drift Worse <\/p>\n Small spending increases can also combine with inflation to reduce retirees\u2019 purchasing power.<\/p>\n Steve Charlton, president of Wisdom Financial<\/a>, said official inflation measures do not always match the price increases households experience.<\/p>\n \u201cIn 1983, the Bureau of Labor Statistics introduced hedonic adjustments \u2014 the idea that if a product gets better, the price increase doesn\u2019t fully count as inflation,\u201d he said.<\/p>\n He argued that this can create a gap between official inflation numbers and real household costs. \u201cYour Social Security COLA is based on that number. Your actual grocery bill is not,\u201d he said.<\/p>\n Over long retirements, that difference can compound. \u201cThe gap is small in year one. By year ten you\u2019re 15% to 20% behind in purchasing power,\u201d he explained.<\/p>\n Make Upgrades Intentional <\/p>\n Retirement budget drift comes from a series of small upgrades that feel harmless at the time. Tracking spending regularly and reviewing financial plans can help retirees enjoy their retirements without slowly eroding the savings meant to support it.<\/p>\n More From GOBankingRates<\/p>\n This article originally appeared on GOBankingRates.com<\/a>: Retirement Budget Drift: 4 Small Upgrades That Quietly Add $500-Plus a Month to Your Spending<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Many retirees enter retirement with a carefully planned spending strategy yet still find their monthly withdrawals creeping higher.…\n","protected":false},"author":2,"featured_media":645119,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[240209,45,49,48,133,125761,131,132,12985,3321],"class_list":["post-645118","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-andrew-latham","tag-business","tag-ca","tag-canada","tag-finance","tag-kevin-marshall","tag-personal-finance","tag-personalfinance","tag-retirement-savings","tag-spending"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/645118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=645118"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/645118\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/645119"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=645118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=645118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=645118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}