Julie retired at 60 and tracked every dollar. Three years later, her costs have risen 29% — here’s what she did about it

My friend Julie is one of the most careful, organised people I know. She retired three years ago at 60 after a lifetime in the public service – steady, sensible, and the kind of person who actually reads the fine print. In preparation for retirement, she did something most of us never do: she started tracking every single cent she spent.

Three years ago her annual spending on the basics – food, car, body corporate fees, insurances, all the day-to-day essentials – sat at $42,000. That felt manageable. She had planned for it.

This year that same figure sits at $54,000. That’s a 29 per cent increase in three years. And she’s the first to tell you she’s dining out less, watching every dollar and cutting back wherever she can.

If her story sounds familiar, you are not alone. Not even slightly.

The anxiety is real — and it’s backed by research

Around half of Australians approaching retirement worry they could run out of money, and only 26 per cent of pre-retirees demonstrate a strong understanding of retirement finances, despite 41 per cent saying they feel confident they can manage.

The annual Challenger Retirement Happiness Index, which surveyed more than 2,000 Australians aged 60 and over, found that 57 per cent worry about being able to maintain their lifestyle, while 54 per cent of pre-retirees say rising cost of living has already affected their financial security.

Challenger’s Chief Executive Mandy Mannix put it plainly: “The dollar value of a lump sum when you retire can seem like a lot of money, but it has to last a long time. The purchasing power of $1 million today can halve in 20 years’ time.”

The fear is understandable. Once you stop working and start drawing down your super, there is no automatic top-up. Every dollar that leaves is a dollar that isn’t compounding. The early years of retirement are the years that matter most – and they are also, for many people, the most expensive, as the dreams deferred during working life finally get acted on.

Here is the practical part. Because anxiety without action helps nobody.

The big bills first — not the small ones

Research suggests Australians achieve better results by targeting large, recurring expenses rather than relying solely on cutting coffees or meals out – with around a quarter of Australians not having shopped around for better deals on major expenses such as energy, insurance or home loans for at least a year.

This is where to start.

Health insurance is one of the most significant and most over-paid expenses for retirees. The average annual benefit paid out by health funds is only $475 per person, compared with an average extras premium of $936 for a single person in NSW – almost double the average benefit, meaning many people are simply not getting value for money.

Check whether you are still paying for pregnancy cover, which you no longer need. Review whether your extras cover is actually earning back more than it costs. Use a comparison site to check what you are actually paying against what is available. A five-minute phone call to your insurer asking for a better rate often works.

Energy bills reset regularly and most providers do not automatically move you to a better plan when one becomes available. Electricity and gas prices tend to reset every 12 months, so compare plans when this happens – you can do this online at Victorian Energy Compare or Energy Made Easy for the rest of Australia. If you haven’t compared in the last twelve months, do it this week.

Subscriptions and automatic renewals are the silent budget killers. It is not uncommon for households to spend $70 to $120 a month on subscriptions they rarely use or have forgotten about – adding up to hundreds of dollars per year on services quietly billing in the background. Go through your bank statements for the last three months and mark everything that comes out automatically. Cancel anything you haven’t used in 60 days.

Medicines are one area where the government has actually helped. As of 1 January 2026, you will not pay more than $25 for a medicine script covered under the Pharmaceutical Benefits Scheme, down from $31.60. Pensioners continue to pay the locked-in fee of $7.70.  If you are on multiple medications, ask your GP about a Home Medication Review, which is covered by Medicare.

Groceries are harder to control but not impossible. Buying in bulk when specials hit, switching to generic brands where quality is comparable, and using supermarket loyalty programs for cashback are all legitimate savers. The loyalty programs in particular are underused – the cashback accumulates quietly and meaningfully over twelve months.

Check what you’re entitled to

Many retirees – particularly those not yet on the Age Pension – are missing out on concessions they qualify for without knowing it. The Commonwealth Seniors Health Card, available to self-funded retirees who meet an income test, delivers significant discounts on PBS medicines, bulk billing incentives and energy bill relief. If cost is a concern, talking to your doctor about free government health programs and using public health services and hospitals is worth exploring, and checking eligibility for healthcare cards and other concessions can meaningfully reduce costs.

The tracking habit my friend swears by

Here is the one thing my friend says has made the biggest difference – not to saving money, but to her peace of mind. She knows exactly what she spends. Every month, every category, every year. That knowledge doesn’t stop costs from rising, but it does stop the anxiety from spiralling. When you can see the numbers clearly, you can act on them. When you can’t, the fear tends to fill the gap.

If you haven’t tracked your spending in retirement, start now. It doesn’t need to be complicated – a simple spreadsheet or even a notebook will do. What you find may surprise you. And what you do about it may surprise you even more.

Nearly three in four retirees surveyed said they would be significantly happier with a guaranteed income for life. Most of us can’t manufacture that. But we can make what we have go further – and in retirement, that is more than enough of a goal to be going on with.

This article is general in nature and does not constitute personal financial advice. Please consult a licensed financial adviser for guidance specific to your circumstances.