Whether you’re planning on retiring completely or reducing your workload as you age, it means a decrease in cash flow. Retirement budgeting is a necessary component of finances as you plan the later years of your life. Some costs such work-clothes and commute decrease and others costs increase, such as insurance and medical needs.
To make retirement savings last, wise spending and learning how to save money in retirement are key components. But that doesn’t mean a penny-wise retirement is stagnant retirement. Re-assessing your current spending can reduce costs significant. You’ll learn what really adds value to your life and what you’re unknowingly ‘wasting’ money on.
How to Save Money in Retirement
- Housing : According to the Employee Benefit Research Institute home-related expenses lead in expenditures, taking up 43% of a retiree’s budget.
- Downsizing may make the most sense to many seniors who want to quickly cut mortgage and up-keep costs.
- Seniors who wish to remain in their same homes can also dramatically reduce costs in other ways.
- Evaluating heating/cooling costs, electricity, and maintenance can dramatically reduce costs.
- Lower costs by investing in a programmable thermostat.
- Testing windows and doors for proper sealing. An easy way to do this is to hold a lit candle near a window or door. If the smoke moves horizontally, there may be an air leak.
- Re-evaluate maintenance costs. Consider having family members help out to mow the lawn, work on landscaping, shovel snow, or perform weekly house cleanings. Hiring professionals for upkeep quickly add up.
- Transportation: The second highest expense is transportation at 14 percent of budget.
- Many seniors make the switch to one vehicle or a more fuel efficient vehicle.
- Reducing car insurance is a worthwhile venture.
- Food: Following closely behind transportation, is food at 13 percent.
- Food is a relatively easy way to cut costs.
- Dining out is often 3 times more expensive than making meals at home.
- But if you are dining out, be sure to ask about senior discounts. These are available even at select grocery stores!
- Planning your grocery list for the week reduces trips to the store, cutting costs.
- Making larger meals and freezer left overs for later on is often times lower costs. Investing in a set of freeze-able glassware that can go straight in the oven for convenience.
- Entertainment: Entertainment, which is about 9 percent of the budget is infamous for wasted money.
- High cost cable bills are a top culprit. Try cutting the cable and switching to Hulu, Netflix, and Amazon prime for viewing entertainment.
- So many times saving money on entertainment is simply about research and planning ahead. Search online for free nights at museums, free lectures or seminars at local colleges, library events, and book clubs.
- And every time you decide to pay for entertainment, plan ahead. Check Groupon or local coupons for discounts. Often you’ll find coupons and discounts for things you were planning on paying full price for.
Retirement is a new stage of life. It often takes time to adjust and figure out new goals and routines. Work doesn’t necessarily cease but shifts. Instead of pouring endless hours into a career that simply pay the bills, seniors can now work freely on jobs or hobbies for which they are passionate. Learning how to save money in retirement is adjusting to those new routines financially and using the retirement budget to accomplish new goals.