If you are retired, most of your money goes on five types of spending.
Understanding where the money goes helps the retired figure out how to make savings and how to spend their cash on doing things they enjoy.
Research in the US and Europe shows that spending follows a specific pattern with 80% of income going out again on housing, food, clothing, transportation and healthcare.
The exact amounts depend on where individuals live. For instance, healthcare is much more expensive in The States than Britain as treatment is paid for in America but free in the UK.
But wherever an expat retires, the good news is some changes to cut spending can make a big difference.
Where to make the cuts
If you are an expat, healthcare can take a big chunk from your monthly income.
Some simple savings include switching from branded to generic medicines. Although the over 65s account for roughly 12% of the population, they take a third of prescription and over-the-counter medicines.
A healthy lifestyle can indirectly cut medical costs as well. A good diet and regular exercise can keep someone fitter for longer.
Housing is probably the most expensive monthly cost – taxes, heating, maintenance and running costs take a large slice of income for someone who has retired.
Changing suppliers and downsizing can shave a lot of money from the bill.
Do you really need to spend big on brands?
Food and clothing are as expensive as you want to make them. You don’t want to starve or dress in rags, but do you really need to eat like a king every night and wear designer brands when you can live just as comfortably for less?
Transport generally means a car. If you live in the suburbs or a rural area, you likely need a reliable car to get around, but in the city public transport and taxis are more efficient and convenient. Although fares can be expensive, the yearly spend is probably less than running your own car.
Lastly, most local authorities and governments offer grants, allowances and tax reliefs to older people – and much of this money goes unclaimed. Always check to see if you are entitled to any financial help, and if you are, make sure you stake a claim for the money.
