7 Expenses That Vanish During Retirement

These bills will disappear for many retirees.

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How much money will you need in retirement? It’s one of the toughest estimates to make in retirement planning. It’s so difficult, in fact, that many people use a rule of thumb, such as 70 percent of pre-retirement income, rather than even trying to guess.

[, {database=usnews(usnews/delegate/solr, usnews/delegate/mysql), status=null, id=00000143-e634-de47-a9cf-fefc41f20000, typeId=00000142-9226-d1f0-a5c6-b2f75ff00005, simpleValues={alignment=left,record={_ref=00000142-926f-d33c-abc6-ff7f6b86001b,_type=00000142-9226-d1f0-a5c6-b2f75ff60014},_id=00000143-e634-de47-a9cf-fefc41f20000,_type=00000142-9226-d1f0-a5c6-b2f75ff00005}, extras={}, errors=null}, ]For those who love a challenge, however, estimating retirement expenses can lead to more precise planning. The good news is there are some expenses that disappear during retirement. Some vanish immediately, while others tend to diminish as we move deeper into our golden years. Here are seven expenses you might be able to eliminate in retirement:

1. Retirement savings. While not exactly an expense, retirement savings should account for a significant part of a monthly budget during our working years. For those socking away 10 to 15 percent of their paycheck, this one item alone can account for a significant reduction in retirement expenses.

2. Mortgage. A worthy goal is to retire your mortgage by the time you retire. While everyone doesn’t achieve this goal, those who plan to pay off the mortgage can reduce their monthly expenses by a fair amount. Keep in mind, however, that paying off a mortgage does not relieve the homeowner of all costs, such as taxes and insurance. In addition, for those who itemize their taxes, take-home pay will be less without the mortgage interest deduction.

3. Commuting. From gas to car maintenance to parking, retirees can save a lot of money while avoiding the daily grind. Those who work in congested cities can often save the most. A weekend visit to New York City earlier this month reminded me of just how much some people pay for a spot in a parking garage.

4. Life insurance. Most retirees do not need life insurance. While there are exceptions, life insurance is typically to replace the income the deceased would have earned for the benefit of dependents. By the time most people reach retirement age, they are no longer supporting dependents with their income. For those who want a small policy to pay for funeral costs, these can be found relatively inexpensively.

5. Family expenses. It costs a lot of money to raise a family. Just clothing, feeding and transporting a family of four puts a big dent in a monthly budget. Add to that the cost of car insurance for teenagers and a college education, and family expenses can easily become one of the largest household expense items. These costs fade away over time, however, and should be completely out of the budget by the time most people retire.

6. Payroll taxes. Payroll taxes are easy to forget until you take a close look at your pay stub. Social Security taxes cost workers 6.2 percent of their pay, up to an annual limit of $113,700 for 2013. Then there is the Medicare tax of 1.45 percent with no limit. And there is another 0.9 percent Medicare tax for those making over $200,000 ($250,000 for couples). Of course, without earned income, these payroll taxes go away in retirement.

7. Second car. For many retired couples, there is less of a need for a second car. Moving to one car saves on everything from a car payment to insurance to maintenance. While many couples may keep two cars when they first retire, it’s not unusual for retirees to eventually get by with just one vehicle.

Rob Berger is an attorney and founder of the popular personal finance and investing blog, doughroller.net. He is also the editor of the Dough Roller Weekly Newsletter, a free newsletter covering all aspects of personal finance and investing.