6 ways retirees can cut costs
Entering retirement is an exciting time and chapter in life that comes with its own unique share of challenges. One of the biggest challenges is adjusting to fixed income.
Retire at any age: Get retirement tips for every stage of life
Learn more: 7 surprisingly easy ways to reach your retirement goals
Retirees will need to take careful financial steps to ensure that they spend their limited flow of money wisely and not on purchases that can increase expenses. Here are some helpful ways to cut costs in retirement.
Create a spending plan
It’s hard to start cutting costs if you’re not sure exactly what’s driving up costs. In addition to determining your monthly expenses with the help of a budget, creating a retiree spending plan can help keep track of current expenses.
A spending plan allows retirees to review expenditures line by line. This helps identify expenses that will increase during retirement, such as travel, or decrease, such as work-related expenses. Once you’ve created a spending plan, use the next few months to track and see if your actual spending matches the chart. Retirees who see a significant difference in expenses increasing or decreasing can update their expense statements accordingly.
Take our survey: Do you think you’ll be able to retire at 65?
Watch out for spending leaks
Spending leaks are very common in retirement. This is where retiring may be too much, such as giving gifts to family members or even organizations like alma mater university.
Retirees need to be careful about exposing spending leaks. Once they figure out where the leaks are, they can pinpoint where budget plugs are needed and better determine which items should be prioritized in a retirement budget. For example, retirees who provide financial support to children or other organizations may need to have a conversation together about changes in gift giving. This allows them to set better boundaries with family, friends, and organizations.
Re-evaluate your living situation
One of the biggest benefits of retirement is the ability to experience more flexibility in where you live. If you live in a major city to ensure proximity to your workplace but no longer need to worry about your commute since entering retirement, now is the time to reassess your living situation.
Could you downsize your existing home and move to a smaller space, such as an apartment or duplex? How about moving to a lower-cost living area, like another city in the same state? Or have you thought about getting out of the state? When you reassess your living situation, you may find that you can quickly cut costs by selling your home or even using home hacking such as renting out spare rooms or spaces in your home that are no longer in use.
I work in a part time job
In addition to cutting costs, such as downsizing your home or eliminating excess monthly expenses that no longer financially benefit your family, retirees may consider finding and working a part-time job. If it’s not a part-time job, explore side work options. For example, a retiree may decide to be self-employed as a consultant. This allows them to set flexible working hours, work with enthusiastic clients and benefit from their years of experience in a particular industry.
Part-time work is also beneficial for retirees in allowing them to explore a job they enjoy and increase their retirement savings at the same time. This helps ensure that your savings decrease and allows you to increase your overall income.
Take advantage of seniors discounts
Now is the time to reveal your age so you can get great discounts.
Retirees and individuals over the age of 50 are eligible to register for AARP membership. This gives seniors and retirees, access to member discounts, products, and services. You may be able to apply specific discounts to groceries, meal delivery services, and online gift retailers. Not sure if a big discount is available? Ask the organization you’re at to discover and enjoy the extra savings that come from being in your early years.
Meet a financial advisor
Retirees who are still unsure about the best ways to cut costs in retirement may consider seeking advice from a trusted financial advisor. A financial advisor or planner will be able to review your financial plan with you and provide another set of eyes to determine if there are any costs you may not have noticed where you can stress.
More from GOBankingRates
This article originally appeared on GOBankingRates.com: 6 Ways Retirees Can Cut Costs
The opinions and opinions expressed here are those of the author and do not necessarily reflect the views and opinions of Nasdaq, Inc.