The average retiree received $1,360.00 per month in 2017 from Social Security. That is $16,320.00 per year. This amount doesn’t seem like enough to survive anywhere in the United States. Company pensions have become less popular in the past ten years. That means financial security for Americans in their later years will rest on pivotal financial decision they make in their 20’s, 30’s, 40’s and 50’s.
Let’s take a peek at some average expenses that most people will have to deal with in their later years.
Real Estate Taxes
When we consider the top 10 states in terms of real estates taxes (New Jersey, Illinois, Texas, New Hampshire, Vermont, Connecticut, Pennsylvania, New York, Ohio, Rhode Island, Wisconsin), the average annual property tax amount is $5,268.18. Please note Illinois and Texas are tied at #2. Therefore, paying the annual property taxes means the average American will only have $11,051.82 remaining for the year.
Based on recent statistics (August 2017) from the US Department of Labor, the average American household spent $4,049.00 in groceries annually during 2016. So let’s say that the retired person ate only at home and never went out to eat; they now have $7,002.82 remaining.
Home Energy Costs
According to the U.S. Department of Energy, the average American household spends at least $2,200.00 per year in energy bills. Of course this depends on several factors, including but not limited to the size of home and the state in which you live. But let’s simply take the average cost of $2,200.00 annually, this leaves the retiree with $4,802.82 for the year.
According to the website, ValuePenguin.com, the average homeowners insurance in the US is $1,083.00. Now we are left with $3,719.82 for the year, or $309.98 per month to deal with anything else the retired person wants to or is obligated to engage in outside of the four basic areas mentioned above.
I will stop right there because I think the point has been driven home. You and I must consider our financial future now, otherwise we could be in dire situations when we are older. Plan now for the anticipated impact to your income!