Hidden Expenses That Impact Retirement

Anthem Healthcare sent me an advertisement for their health insurance and priced it on a daily basis. “Now just $1.58 per day!” Naturally, that rate didn’t apply to me but to a hypothetical 35 year old “healthy” male. Surely their comprehensive database could have sent the quote for me as a 50 year old. In any case, you don’t pay insurance daily. That $1.58 day rate is paid at $47.40 per month or almost $600 per year, which for health insurance is pretty inexpensive. I called and my daily rate would be $5.04 per day or $151 per month or $1,840 per year. Still sounds good but did I mention this is for a plan with a $10,000 deductible?

The Anthem offer happened to arrive as I was reviewing my bills and expenses for 2012 and looking at the costs of my lifestyle on an annual basis. Quoting a daily price makes an expense seem lower. If you’re making $40,000 per year, $10 per day is chump change and far less than 1% of your earnings. Annualize this expense and it doesn’t seem so cheap. $10 per day is $3,650 per year or 9.125% of earnings!

The bill that got me thinking was my cable bill. The TV portion was $87.77 monthly or $1,053.24 per year! You do not have to be a mathematician, or need a calculator, to see the impact that can have on your retirement savings. With so many options available for streaming, particularly Amazon’s new offer to Prime Members of free TV shows and movies, and the availability of free digital broadcasts of local stations, we have decided to drop cable TV. You should know we only watch TV an average of 1-2 hours per day, so this isn’t as drastic a lifestyle change as it may sound.

Many of the expenses we take for granted are bills our parents never had to pay. Cell phones, cable, and internet were not available 50 years ago. All of these expenses combine to make it very difficult for our generation to save and invest. They are one of the sources of debt, particularly if you experience any periods of unemployment.

Over the next month, I’ll be sharing more expenses and how they impact our ability to save and invest for retirement. If you notice any in your own bills, please let me know.

About Paul Puckett

3 Responses to “Hidden Expenses That Impact Retirement”

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  1. I hope to eliminate most of these expenses in retirement. Health care is probably the biggest challenge and biggest future worry.

  2. greg says:

    If anyone out there is considering an ‘Anthem’ Healthcare policy, you’d better
    check out ALL their limits and exclusions. Most cheapo healthcare policies being
    heavily advertised these days are NOT real major medical plans, they have limits
    that make them virtually useless if you get sick more than once a year, for instance.

  3. Gina says:

    Last year our electric bill was $142.60, gas bill was $128.50 for TWO people. $271.00 just for light and heat and to cook was way tooooo high in my opinion. We went crazy town on it.. to lower our bills.

    Our electric bill was $78.19, and our gas bill was $82.00 THIS year. This is a savings of $100.00 for this month compared to last year.

    How we did it:

    Turn off heat at night!! Yeah you read correctly..we use electric mattress pad to keep us warm at night, and then when my husband gets up he turns heat back on to 66. When we go to work it goes back off. We of course would leave it on if it got way below freezing..but our winter has been mild. Without the heat on during the day it stays anywhere from 60-66 degrees, so we throw on a sweater and hug the dogs.

    Unplugged the dryer. We hang everything up to dry in our basement on clothing racks and shower poles.
    A little bit of extra effort saves us at least 20.00 a month.

    Cook everything possible in the crock pot. It is amazing what you can cook in those things. They save electricity and $ on gas bills.

    Unplug unecessary items, that lamp that is never used, unplugged, turn off the computer at night, don’t leave that porch light on all night. etc..

    Keep the freezer and fridge full to run more effectively. Use milk jugs of water in freezer to keep full, and water or juice jugs in fridge.

    Use the sun..for sun tea, we drink ice tea everyday, so in the morning out goes the tea pitcher for sun tea.

    Wrapped the hot water heater in insulation blanket and then in a second bubble wrap type blanket.

    A 100.00 a month is twelve hundred a year, twelve THOUSAND IN 10 YEARS. So yeah my clothes may be wrinkled, and i may be bundled up at home to stay warm… but I am saving a bundle of cash for my future self, and future self likey LOTS of cash!! LOL

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