How To Cut Your Second Biggest Expense In Retirement

After housing, transportation is the second-biggest expense for Americans age 65 and older.

This demographic spent a mean of $7,160 on transportation in 2021, according to the U.S. Bureau of Labor Statistics. That’s about $600 per month.

Keep in mind that 2021 was a pandemic year. People weren’t driving nearly as much as they would have normally.

A Cultural Shift

Car culture and American culture have long been intertwined.

The United States is one of the most car-dependent countries in the world, with one of the highest numbers of motor vehicles per 1,000 people at 831.

For older Americans in particular, cars are essential to daily life. An estimated 70% of Americans over 50 live in suburban or rural areas where public transportation is limited or just doesn’t exist.

It can be hard to picture a lifestyle that doesn’t involve driving every day, but in many desirable locations around the world, that’s the norm. People either walk from A to B or rely on efficient and user-friendly public transportation systems.

By relocating to one of those places, you can cut down on your second-biggest expense in retirement. I’ve identified three top destinations where you can live car-free and given you a snapshot of how much you can expect to save per month on transportation alone in each.

Note that these are all places where long-term retirement living is possible for the average American. You won’t see Singapore, Hong Kong, or other cities that are world-renowned for their transport systems but impossible to move to from a residency perspective on this list.

Madrid, Spain

Spain is extremely well connected in terms of public transport. After China, it has the second-most extensive high-speed rail network in the world.

Its capital city, Madrid, is a place where you never need to get behind the wheel again. In fact, there are limits on driving in Madrid Central. All but electric and hybrid cars are banned.

Madrid is a geographically big, spread-out city, but it’s extremely walkable, with smooth paving and wide sidewalks throughout.

Public transportation in Madrid consists of the Metro (a rapid transit system), Cercanías Madrid (a commuter rail service), Metro Ligero (a light rail system), and bus services.

Using a combination of these options will get you anywhere you need to go inexpensively. A single journey on the bus or Metro costs 1.50 euros, or about $1.62; a standard 30-day pass costs 21.80 euros, or $23.55.

That’s 95% less than what the average American over 65 paid in 2021.

If you’re a senior citizen (65 or older) and hold a personal Public Transport Card, the entire Metro transport network is free to you. You could cut your transport bill to zero per month simply by moving to Madrid.

Even if you decide to use some non-public transportation (taxis, Uber
, Cabify, etc.), you could save hundreds of dollars per month.

Medellin, Colombia

Medellin is the best choice in Latin America for car-free living.

It’s the only city in Colombia with a commuter rail. The Medellin Metro is the pride of the city, used by over half a million people per day. It includes the Metrocable, a gondola system that serves the city’s formerly hard-to-reach hillside neighborhoods.

The Metro’s standard fare is 2,880 Colombian pesos, which is 65 cents. For seniors, it’s slightly less, at 2,660 pesos, or about 60 cents.

Relying solely on the Metro to get around and riding it two or three times a day, your monthly transport bill would come to about $45. That’s 92% less than what the average American 65 and older pays per month.

If you incorporate other forms of public transport into your monthly routine, you’ll choose from the Metroplús, a bus transit service, the Ayacucho Tram system, as well as taxis, Cabify, and Uber. Unofficial transport options in Medellin include colectivos (shared taxis that travel when the car is full of passengers) and mototaxis (motorcycle taxis).

Expats report spending about $95 per month using a mix of these options—still a bargain compared to transportation costs back home.

You can also get around Medellin on foot in some neighborhoods and by bicycle. It’s an eco-conscious city, so it has invested in bike lanes and provided free public bikes.

Bangkok, Thailand

Having a car in Bangkok is entirely unnecessary thanks to its well-connected public transport network. In fact, a car would hinder you more than it would serve you in this city that is notorious for traffic jams and impossible parking.

Four rapid transit systems serve Bangkok, including the BTS Skytrain (an elevated rapid transit system), the MRT (metro), the SRT Red Lines (a commuter rail system), and the Airport Rail Link (an express rail line that connects the city center with Suvarnabhumi Airport).

Other ways of getting around include an extensive bus network that includes minibus vans and song thaeo (converted pick-up trucks with passenger benches in the cargo bed). There are also taxis, tuk-tuks, motorcycle taxis, and ride-hailing apps, like Grab and Bolt.

Bangkok sits on the Chao Phraya River, and boats have long been a part of its public transport network. Water buses and long-tail boats serve tens of thousands of commuters daily and are affordable transport options.

This isn’t much of a walking city, but it provides myriad options for getting around. Expats report spending about $120 on transport in Bangkok per month using a combination of them, which is 80% less than the average American 65 and older.

Other Benefits Of Going Car-Free

Some cities, particularly in the Old World, were designed for walking. They continue to be best navigated on foot. Other cities have been retrofitted with bike lanes.

Using your body to get around instead of driving has health benefits. It burns calories, builds stamina, and makes your heart healthier. Walking has mental health benefits, increasing mental alertness and improving mood.

Shifting away from car use also has a positive impact on the environment, reducing emissions of carbon dioxide and other pollutants. Walking, cycling, and using public transportation are also much safer than driving a car.

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