5 Ways You Will Save Money After Retirement

Many financial planners and online calculators assume you will need about 80 percent of your pre-retirement income to maintain your lifestyle in retirement. But everyone's situation will be different. Super savers who tuck away 30 to 50 percent of their paychecks will need much less than 80 percent of their income after retirement. They get used to living below their means, and that habit will carry into retirement.

There are also many expenses that will be reduced after retirement. Some work-related costs retire along with the job, while others can be eliminated once you are no longer supporting a family. Here's how retirees spend less than their working counterparts:

Housing. Housing is the biggest monthly expense for most working households, but this can change in retirement. If you have been diligent about paying down your mortgage, you could pay off the loan before retirement. This will reduce the monthly cost of housing greatly, but that's not the only way to spend less.

After retirement you won't be tied down to a location near work anymore, and the possibilities are endless at this juncture in life. You can sell your home and downsize, move to a cheaper location in the U.S. or even try living in a recreational vehicle. According to the U.S. Bureau of Labor Statistics, the average American family spends about 30 percent of their budget on housing. Housing is the biggest part of most families' spending, and it's worth it for the long term if you can find a way to reduce this expense.

Transportation. One thing most employees won't miss about work is the commute. The national average daily commute is almost an hour. When you're retired, you won't have to get frustrated at rush hour anymore, and you'll also save on gasoline and car insurance. If you live in a location with reliable public transportation, then getting rid of your car is a realistic option. You won't have to pay for the increasing cost of gasoline, car insurance, repairs, maintenance or car payments. Using other forms of transportation, such as biking to the grocery store, can serve the dual purpose of getting a necessary chore done while exercising. Car sharing is another great option if you live in a city with such a service.

Kids. According to the USDA, it costs anywhere from $9,000 to $25,000 each year to raise a child for 18 years in the U.S., and that's not even including higher education. These costs include a larger home, child care, sports equipment, after school activities, health care, clothing, transportation and the huge amount of food they consume. Hopefully, by the time you retire, the kids will be out of the house and the bulk of these expenses will go away. Housing is the biggest part of child rearing expenditures, so downsizing is a great way to save once the kids are gone.

Work-related expenses. It can cost quite a bit of money to keep a professional appearance. Professional clothes and shoes are expensive, and once you're retired you won't need to wear them anymore. And espresso shots can help you stay focused at work, but they are also a drain on your wallet. A good cup of coffee at home is much more affordable, and you won't need as much caffeine because you can rest whenever you need to. These expenses might not seem like a lot, but they all add up to a substantial amount each year.

Conveniences. Employees with a full-time job don't have much extra time, so they value conveniences and are willing to pay for them. Retirement is a different story. You have a lot more time and less income in retirement, so you have to prioritize things differently. For example, cooking at home can be just as good as eating out, but it takes more time. In retirement you can alter your routine to use your time wisely in order to save money.

As you adjust to the retirement lifestyle, you will find that there are certain expenses you are able to save on. The bulk of these expenses are often necessary during your working years, but retirees can reduce or eliminate these costs, freeing up time and money for something else.

Joe Udo blogs at Retire By 40 where he writes about passive income, frugal living, retirement investing and the challenges of early retirement. He recently left his corporate job to be a stay at home dad and blogger and is having the time of his life.