The ONE Expense You Must Cut Before Retirement

Summary

In this video, Aaron discusses Susie Orman's advice on retirement expenses, challenging the common belief that the biggest cost is mortgage payments. Instead, she highlights dining out as a major expense that can significantly impact a retiree's budget. Aaron supports this view but emphasizes that housing costs, which can consume over 40% of a retiree's income, should be prioritized for reduction. He advocates for long-term financial planning, focusing on minimizing major expenses like housing and transportation, to allow for a more enjoyable retirement experience free from financial strain.

Takeaways

• 😀 Susie Orman's advice highlights dining out as a major expense to cut in retirement.
• 😀 Many people mistakenly believe paying off a mortgage is the most crucial retirement expense.
• 😀 On average, Americans eat out about eight times a month, which can significantly impact their budgets.
• 😀 Housing costs typically account for around 42% of a retiree's budget, compared to 15% for dining out.
• 😀 Many retirees still carry substantial mortgage balances, with a median of $150,000 to $200,000.
• 😀 Reducing housing expenses can provide more financial flexibility in retirement.
• 😀 Tackling larger expenses, like housing and transportation, is more impactful than cutting small discretionary spending.
• 😀 Living modestly in terms of housing and transportation can lead to more discretionary income for enjoyment.
• 😀 Creating a fulfilling retirement starts well before retirement, focusing on savings and investment during working years.
• 😀 Aaron encourages a balanced approach to budgeting, where enjoying life in retirement is as important as managing expenses.

Q & A

What is the main topic of Aaron's video?

The video discusses the expense to cut in retirement, specifically focusing on dining out versus housing costs.

What expense did Susie Orman suggest retirees should cut back on?

Susie Orman suggested that retirees should cut back on eating out.

How often does the typical American eat out, according to the video?

On average, the typical American eats out eight times a month.

What percentage of income do retirees typically spend on dining out?

Surveys show that retirees spend about 15% of their income on dining out.

Why does Aaron believe housing costs should be prioritized over dining out expenses?

Aaron believes reducing housing costs will provide far more financial flexibility and has a greater impact on budgets.

What is the average mortgage balance for individuals near retirement age?

The average mortgage balance for individuals near retirement age typically ranges from $150,000 to $200,000.

What is the median monthly mortgage payment for retirees?

The median monthly mortgage payment for someone at or near retirement age is slightly under $1,000.

What alternative does Aaron suggest for managing retirement expenses?

Aaron suggests focusing on bigger expenses like housing and transportation to create more breathing room in the budget.

How does Aaron feel about cutting small expenses like dining out?

While he acknowledges that cutting small expenses can be helpful, he emphasizes the importance of addressing larger expenses first.

What does Aaron imply about the enjoyment of money in retirement?

Aaron implies that it's important to have discretionary income in retirement to enjoy life, rather than strictly cutting all expenses.