Washington County Weekend Post

2A • WASHINGTON COUNTY POST • SUNDAY, JANUARY 31, 2021 GMTODAY.COM Work is a major compo- nent of daily life, so much so that Andrew Naber, an industrial and organization- al psychologist and an associate behavioral scien- tist at RAND Corp., deter- mined that the average person spends 90,000 hours at work over the course of his or her lifetime. Accord- ing to a 2014 Gallup poll, the average American retires at age 62, but roughly 64 per- cent of professionals bid farewell to the workplace between ages 55 and 65. Retirees must make a num- ber of adjustments once they call it a career. No such adjustment is as significant as the financial one. Most people find their post-retire- ment income is considerably less than when they were working full-time. That is why financial planners often recommend saving and investing enough during working years to be able to replace 80 percent of pre- retirement income. Certain expenses get lower after retirement, but some will rise. Here's a look at what to expect when the bills come due during retirement. • Food costs: Food costs may go down in retirement because shopping and pre- paring meals for one or two people is much less costly than feeding a family of four or more. However, dining out may increase as you have more free time to visit local eateries. • Automotive costs: According to data from the U.S. Department of Trans- portation, the average com- muter spends 25.8 minutes behind the wheel twice a day, and the average driver puts in 13,474 miles behind the wheel each year — with people between the ages of 35 and 54 clocking close to 15,000 miles. Less time spent in the car means fewer gaso- line fill-ups and longer dura- tions between oil changes and other services. In addi- tion, based on the Internal Revenue Service reimburse- ment rate of 58 cents per mile, a typical commute of 20 to 30 miles a day costs $11 to $16 a day or $55 to $80 a week. In a year, you could easily be spending $2,000 to $4,000 a year commuting if you live within 15 miles of your job. Without commut- ing, that cash stays in your pocket. • Taxes: Many people can expect to be done paying fed- eral income taxes when they are retired and no longer earning an income. If the majority of retirement sav- ings were in Roth IRA accounts, contributions are available for withdrawal tax- and penalty-free at any age. • Housing: Your mort- gage may be paid off before or soon after retirement. That eliminates the single largest expense in many peo- ple's budgets. If your home will not be paid off, it's possi- ble to downsize to reduce monthly payments. • Travel: While many other expenses can go down, travel is one expense that can shoot up during retire- ment. But many people are happy to bear this cost. With more time for travel, retirees may allocate more funds toward vacations and other great escapes. • Health care: Seniors often see their health care needs and costs go up after retirement. It's important to understand what is covered by health plans, and it's equally important to set money aside for unforeseen medical expenses. Many costs of living decrease after retirement. However, it is wise to take in the whole picture to under- stand how to budget for retirement. How expenses can change during retirement In the digital era, many errands that once required leaving the house can be con- ducted from the comforts of home. Groceries can be ordered online and delivered to consumers' doorsteps, while bills can be paid online, saving men and women from having to drive to their nearby post office. Online banking has revo- lutionized the way people manage their money. Invest- ors can buy or sell stocks with the click of a mouse, and money can be moved across accounts just as easi- ly and instantly. Many con- sumers now even do their banking on their mobile phones. In fact, a 2016 study from the Federal Reserve found that 67 percent of mil- lennials use mobile banking, suggesting that mobile bank- ing is the wave of the future. While online or mobile banking makes it easy for consumers to manage their money, it's also potentially much riskier than in-person banking at the bank. Unseen hackers and thieves are lurk- ing online and in places where Wi-Fi is open and free, so online and mobile bank- ing enthusiasts must exer- cise caution when accessing their accounts. • Sign up for two-factor authentication. Some banks and credit card com- panies now provide two- factor authentication, and some may even insist their customers use it. Two-factor authentication requires two forms of verification before users can log into their accounts. The first might be the traditional username and password, while the second might be a temporary code texted or emailed to users after they log into their accounts. Some con- sumers may feel two-factor authentication is tedious and slow, but it's an effective safety measure that should only delay online or mobile banking by a few seconds. • Use only secure net- work connections. Public Wi-Fi can be convenient, but consumers should never use such connections to do their online or mobile banking. The American Bankers Association suggests con- sumers always do their online banking via their own private home networks. Con- sumers who routinely use public Wi-Fi, even if it's just for basic internet surfing, should log out of mobile banking apps or websites before logging on to public networks. • Change passwords frequently and avoid using the same password for more than one account. Many banking websites advise customers if their passwords are weak or strong when customers first set up their accounts. Even if customers' passwords are deemed strong, it's best to change them periodically so hackers or criminals cannot guess them. And consumers should never use the same password for more than one account, as that can make it much easier for criminals to steal consumers' identities. • Monitor credit scores. Consumers have the right to one free credit report each year, but many credit card companies now update cus- tomers regarding their cred- it scores once per month. Consumers many need to sign up to take advantage of this service, but doing so is typically free. If credit scores suddenly dip unex- pectedly and without reason, consumers may have been victimized by identity theft and can then take the neces- sary course of action to address the issue. Online and mobile bank- ing is convenient, but con- sumers must tread carefully when accessing sensitive financial information on- line. Online banking safety tips

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