Some expenses in retirement will be lower than in pre-retirement:

• Housing costs should decrease as large loans and mortgages are paid.

• Work-related expenses such as lunches away from home, dues, transportation, and maintaining a working wardrobe are diminished.

• Educational expenses for children are paid.

• Most large household improvements and home furnishing expenses are decreased.

• Deductions for Social Security and contributions to a pension plan cease.

• Savings and investments usually decrease but, if possible, do not stop.

• Disability insurance will no longer be needed, and you may choose to stop life insurance payments or convert policy to an annuity.

• Discounts are available for some goods and services after age 55.

• Federal and state income taxes are lower if you are living on 60 to 80 percent of prior income.

Some expenses will remain similar to those in pre-retirement days:

• Food prepared at home.

• Gifts.

• Personal care.

• Automobile expenses, including insurance, unless you reduce the number of vehicles you own and operate.

• Utilities, that may be constant or increase, depending upon how much time you spend at home.

• Homeowner's/renter's insurance.

• Taxes. You may be taxed on Social Security benefits, depending upon your tax bracket. Some states tax pension benefits.

• Medical expenses and health insurance rates for those over 65 are rising faster than inflation.

• Medical and dental insurance will need to be purchased until you are eligible for Medicare if you retire before age 65. Medical and dental expenses may also be higher after age 65, because many services are not covered by Medicare and are needed more frequently as people age.

• Expenditures for leisure, travel, and entertainment may increase, especially in early retirement years.

• The cost of care for an elderly parent or relative may be very high.

• Gifts and contributions may take a larger share of a smaller income.