After having saved diligently for years, at last you’ve reached retirement and are ready to enjoy the next phase of your life. Now, how do you handle the financial aspects of it?
Even if you’ve managed to amass a significant nest egg, most people still have to follow a retirement budget. You want to ensure your money will last, so here are 7 tips to keep your expenses low in retirement.
Downsize your home and possessions.
Since housing is one of the largest expenses most people ever take on, a great way to save money in retirement is to downsize your home. Often, the house you lived in as a working adult is just too large for a retiree. If you’re down to just one or two people, you don’t need as much living space anymore.
You can lower the monthly bills by selling your house and buying or renting a more manageable, less expensive place like a condo. In addition, you might get rid of certain possessions. Sell, donate, or bequeath items, and you won’t need so much living or storage space.
Cut back to one vehicle
When downsizing your home, you can also downsize your transportation. If you’ve been a two-car family (or more), perhaps you could sell a vehicle you no longer need. This provides the cash from the sale as well as lowering your insurance expenses.
Use senior discounts
Take advantage of the businesses that offer senior-citizen discounts. A quick Google search will reveal hundreds of ways to save at a certain age or with senior-based memberships.
Don’t be shy about asking for discounts. You can lower your retirement bills by taking advantage of percentage discounts and special offers at restaurants, retailers, hotels, and more. For instance, seniors age 62 and up get special pricing on a lifetime National Parks pass.
Negotiate or drop insurance coverage
As you grow older, you may find you don’t need all the insurance you carried earlier in life. For instance, a term life insurance policy may be unnecessary if you have no dependents or your expenses are generally low.
Ask the companies that insure your home and car for a reduction in premiums now that you’re retired. Cutting out a commute could reduce your car insurance costs, and being home more of the time could reduce home insurance costs.
Enjoy free activities
The free hours opened up in retirement can lead to spending money to fill that time, if you’re not paying attention. While you’ll want to do some things that cost money, be sure to look for free entertainment in your community. You may find free things to occupy your time like concerts in the park, hiking on beautiful trails, or taking a class at the local library or senior center.
Prepare for aging in place
If you’re hoping to stay in your home for many years, health challenges may come along and make that difficult. To increase the odds of remaining in your home longer, prepare your home for aging. Help prevent falls by installing safety mats and grab bars or changing hardwood floors to carpeting. This may cost a bit up-front, but could save money by enabling you to live in your home longer, delaying the potential need to move to an assisted-living facility.
If you’re single or have lost a spouse, you may want to split the cost of living expenses by sharing a home with a roommate or moving in with family members. Besides downsizing, this can make the biggest difference in housing costs in retirement. Plus, you get the social benefits of sharing your space instead of living in isolation.
Retirement expenses can be minimized with some planning and consideration, so try these ideas for lowering your bills.