When people think about the biggest expenses they’ll face once they retire, they generally consider things like housing and healthcare. However, one of the expenses that often goes overlooked is transportation. According to the Bureau of Labor Statistics, transportation is actually the number-two expense for people age 65 and older. Transportation now costs an average of $7,100 annually for a retirement-age household, an amount that often exceeds the cost of healthcare. Some common transportation expenses include car payments, fuel, maintenance, insurance, and other transportation services. Accounting for these expenses is important in figuring out the right amount to save for retirement.
People often assume that they’ll travel less in retirement. This assumption makes sense at first, since retirees no longer have a daily commute for work. At the same time, retirement is not always as relaxed as one might imagine. Many people start to travel more and keep busy in their community with hobbies, volunteering, and visiting friends and family. All of that travel can add up quickly and keep transportation expenses fairly high, especially since the majority of retired people live in rural and suburban areas where public transportation does not cover all their needs. Unfortunately, driving is not always an option either, especially as people grow older and feel less safe behind the wheel or become physically unable to drive. Ride-hailing services like Uber and Lyft, as well as the traditional taxi, are another option, but the cost can be very high.
Ultimately, many retirees will find themselves in a position of needing to reduce their monthly transportation expenses. When this happens, some options to keep in mind include:
Get familiar with public transportation.
While public transportation is not always the most convenient for people who need to get to and from work, the options can be more suitable for retirees, who generally have more flexible schedules. Relying on public transportation often saves retirees a lot of money even if it is less convenient than using a personal vehicle. Retirees who live in an urban area can often get along fine without owning a car, and they may receive discounts for using public transportation options. However, even in suburban and rural areas, people may not be familiar with all the options available. Understanding the local bus systems and how they work is a valuable skill, and becoming comfortable with public transit can be key in reducing transportation expenses.
Consolidate individual vehicles.
Before retirement, it is not uncommon for all members of a household to have their own vehicles. Once retired, however, you and your partner may not need multiple cars. With more flexible schedules, it is often possible to meet everyone’s transportation needs with only a single vehicle. Selling a vehicle can cut down on insurance, fuel costs, and maintenance, as well as bring a little bit of income into the household. Of course, you should make sure that you choose to keep the vehicle that is most likely to last without needing many repairs in the future. Sometimes, it makes sense to sell two older vehicles and use the money from both to purchase a brand-new car, especially if it will meet your transportation needs for the foreseeable future.
Plan ahead when possible.
Some transportation expenses encountered in retirement are fairly unavoidable. For example, people who want to travel will need to purchase airfare to get themselves around the world. Even with this sort of travel, however, it pays to plan ahead and get tickets early when they are cheaper. Retirees should become familiar with typical airfare costs so that they can spot a deal when they see one. Shopping around for deals can help you save hundreds of dollars when it comes to international and even domestic travel. Plus, it helps that retirees are generally pretty flexible in terms of schedule and can fly on typical “off” days. Learning more about airfare is one of the best ways to trim down a transportation budget.
Carpool with other retirees.
A great way to reduce transportation expenses is to join forces with other people in a similar situation. By finding local friends for a carpool, you can reduce your dependence on your own vehicle. For example, you and several friends can carpool to go grocery shopping each week, with a different person driving each trip so that wear and tear on all vehicles is significantly reduced. You may also be able to find people traveling to the same destinations for holidays and be able to plan trips together to reduce the cost burden on any one person. These arrangements could even turn into a car-sharing deal if it becomes apparent that no one in the group really needs their own car.
Relocating to save on transportation expenses may sound like a drastic measure, but if you are already planning to move, you should certainly consider transportation costs when deciding where to go. Some communities made for senior living offer shuttles to nearby destinations and other assistance with transportation that can help save on personal costs.
In addition, you may wish to consider moving to a city with good public transportation. No one likes to think about it, but you may eventually lose the ability to drive due to health reasons. Being unable to drive can represent a huge loss of independence, and it can isolate you when you live in a community where cars are needed to go anywhere. In a city, you may be able to walk a block to the grocery store, for example, or take the subway to a doctor’s appointment. Walking is also excellent exercise.
Besides public transit, other points to consider when deciding where to retire include proximity to friends and family who will be able to give you rides when needed or share a carpool. Excellent alternative transportation options may eliminate the need for a car completely.