You have a rough idea of how much your electric bill will be next month.
You don’t know, however, how much your electric bill will be in 30 years (feel free to sub in your own expected retirement date). That’s due to a combination of factors, many outside your control: things like inflation, advances in technology and whether we’ll be getting by on the sun’s rays by then.
The difficulty of nailing down future expenses may be one reason why nearly half of workers haven’t attempted to calculate how much money they’ll need for retirement, according to the Employee Benefit Research Institute.
If that’s you, you’re missing out on potentially good news: Many people spend less after retiring than they did beforehand. Here are five expenses that will change during your later years.
1. Health care spending
Let’s rip off the Band-Aid — an apt metaphor here — and start with one expense that is likely to go up. As you age, you’ll probably encounter health issues, which cost money.
Bureau of Labor Statistics data from 2013 showed that spending of post-retirement households (ages 65 to 79) was about 77% of spending of pre-retirement households (ages 50 to 64), according to a recent analysis from the Government Accountability Office. All expenditures on their list went down during those later retired years — except for health care spending, which jumped from $3,900 per year to $5,000.
Both your health insurance premiums and your out-of-pocket medical costs may rise in retirement, even after Medicare kicks in — especially if your employer picked up a large portion of your insurance premiums pre-retirement.
2. Saving for retirement
One of the best things about being retired is you’ll no longer have to save for retirement. Of course, if you haven’t been saving for retirement, this won’t help you. But if you have, eliminating that contribution to savings gives a noticeable boost to your monthly budget.
“Depending on how aggressively you saved in your younger years, this could be a considerable reduction in your costs,” says William Hubble, a financial advisor in Addison, Texas.
It’s also one reason why one retirement-planning rule of thumb recommends replacing just 80% of pre-retirement income.
3. Insurance costs
We already know health insurance costs may go up. But that rise could be counteracted by other insurance premiums that you may be able to drop or significantly reduce — namely, life and disability coverage.
In a typical scenario, you don’t need life insurance in retirement because you no longer have income to replace — instead, you’re drawing income from investments — and in many cases, you’ve paid off big debts, such as a mortgage. Disability insurance, meant to replace income if you’re no longer able to work, generally isn’t needed if you’re not working.
Of course, that assumes the kind of retirement that is spent primarily in a rocking chair on the front porch. These days, many retirees ease into that life, keeping one foot in the office at least part-time. If that’s your plan, and you’re relying on that extra income, you may want to continue these policies, says Hubble, though perhaps they could be reduced.
This depends largely on how you saved for retirement and which accounts you used, but there’s a good chance at least some portion of your retirement income won’t be taxable. Money drawn from a Roth IRA in retirement, for instance, is tax-free. That’s why it’s generally a good idea to switch to funding that account once you’ve put enough in your 401(k) to grab the maximum employer matching dollars each year.
»MORE: Where and how to open an IRA
Social Security income is taxed only if you have substantial income from other sources. Even then, it’s only partially taxable — no matter what, you won’t pay federal taxes on more than 85% of your benefit.
You will pay taxes on distributions from 401(k)s and traditional IRAs, but in general, your income drawn from investments will likely be lower than income you earned while working. “If you’re drawing 80% of what you were earning, that’s a 20% reduction in taxable income, so your taxes might go down,” Hubble says. “But life doesn’t always follow a rule.”
By that, he means you need to look at your specific situation. If you’re planning to draw more from investment accounts in retirement than you earned pre-retirement, your taxes could actually go up.
5. Housing and lifestyle expenses
Your mortgage, as noted above, ideally will be on your list of things to pay off before you walk away from your desk for the last time. Doing so can free up a ton of room in your budget. Keep in mind, however, that you’ll still need to pay for things like homeowners insurance, property taxes and that inevitable maintenance.
As for other lifestyle spending: Some people want to spend retirement on an airplane; others want to spend it on the couch. Where you fall on that spectrum will determine how your expenses will change. Generally, though, monthly expenses like food, entertainment, apparel and transportation went down in the GAO analysis.
Finally, what about that electric bill? Hard to say, but current projections have the cost of retail electricity going up 18% by 2040.
» More: NerdWallet’s guide to retirement planning
This article was written by NerdWallet and was originally published by USA Today.