Tips To Save Money When You Retire

Federation To Protect
5 min readJul 30, 2016

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To retire comfortably, most sources suggest that you should save between 70 and 90 percent of your income per year that you expect to be retired. That statistic and associated savings might seem high, especially if you have not saved enough by retirement. It gets worse: most people usually underestimate their retirement savings needs. This is because they fail to take into account costs such as home-based health care, home maintenance costs, and rising property taxes.

Never fear! It is never too late to start saving, even in retirement. Here are a few simple steps that can help you right-size your daily needs, maximize your savings, and still enjoy your retirement lifestyle:

Make a plan

The more carefully you plan now, the less you will worry later. Building a budget can be a freeing exercise because it makes plain your income, costs, and priorities. Do you like a certain part of your lifestyle, then keep it! There is almost always a way to find the budget for priorities if you carefully chart your expenses, shift costs, and eliminate waste.

A fiduciary can help you professional plan your budget, but if you’d like to do it yourself, make a list of all of your recurring (and expected) bills and expenses. Then, for three months, make a list of every single penny you spend or donate. Use both lists to determine your monthly and annual expenses. Little costs add up! Don’t forget that coffee shop visit…A daily purchase of premium coffee can cost $5 a day which turns into an expense of $150 per month or $1825 per year. After charting your expenses, make a list of your income sources. You may receive a pension, 401k or IRA distribution, Social Security payments, savings, investments, or have a part time income stream. Once complete, compare income and expenses. Do you have money left over? Great, save it for unforeseen circumstances. Are you in the red? Then it is time to trim some costs or donations.

Eat Healthy and Exercise

One of the best ways to save money is to keep maintain a clean bill of health. By eating right and exercising, you can stay alert, build strong bones and muscles, and minimize the risk of developing costly late-in-life diseases. The longer you stay active, the less (expensive) care you will need. Couples retiring in 2013 will need an estimated $220,000 to cover lifetime medical expenses, according to Fidelity Investments. Study your Medicare and healthcare plans and benefits. Do you need a recurring medication? Find a health plan that covers it. If your health plan is too expensive, shop carefully to find a better deal with similar benefits.

Save on Tax Bill

If you worked with a fiduciary in tip 1, they may have mentioned that taxes play a significant role in retirement expenses. Local and state taxes shift significantly with home location. While this decision can be emotional, it may be time to change your home location and/or downsize your home in order to save money. Taxes in central districts, school districts, and utility districts may all be higher than less central locations. Do some research on your desired place of living. If you don’t need the extra space (if the kids have left home, or you can’t walk upstairs), consider resizing your home to a single level on a small property. Minimizing property and home size can shave significant expense off your annual tax bill, plus you can sock away the money you make from the sale (minus tax).

Join the Club

Too many club memberships can become excessive but joining a few clubs can provide access to lifestyle choices for reduced prices. For example, you can buy items in bulk at Costco or BJ’s Wholesale, save on roadside assistance by joining AAA, or grab some discounts by joining AARP. Shopping and service clubs offer discounts on many necessities and luxuries. In addition to clubs, don’t forget to exercise your Senior Citizen discount and clip your coupons (online and in your paper)! National and local businesses alike offer discounts for everything from train tickets, to movies, to all of the greatest National Parks.

Reschedule Your Schedule

Your whole life you have been busy with work during the day. Once you are retired, you have an open schedule on your side. Do you like to travel? Find cheaper off-peak fares mid-week or off-season. Do you like golf? It is usually cheaper on weekday afternoons. Do you like eating out? Enjoy a lunch special — far cheaper than a dinner. Stop by your local library or senior center to find out about free classes and activities, usually offered during “work” hours. Replace recurring non-active memberships (and their associated fees) with free community activity classes. By shifting your schedule, it can be possible to enjoy all the finer things in life, still well within your budgetary requirements.

Right-Size Your Stuff

Cars — Is it possible to eliminate a car? Using one car per couple reduces maintenance, tax, insurance, and storage costs. You can always rent a second car if you need it for a long trip, or use a ride sharing service close to home. Insurance — call and ask about insurance discounts. Now that you no longer drive to work, maybe you qualify for a low-mileage discount. Eliminate cable — While you are at the library, learn about the free e-books, digital downloads, audiobooks, and the free movies all offered by your local system. You can usually find the entertainment you need and, if you can eliminate your monthly cable bill in the process, savings can really add up. Cell phone — Now that you are off work, you may not need as many minutes or as much data; perhaps a cheaper plan can fit your needs.

Add an Income Stream

Selling online is fun and easy and it is a great way to offload your “vintage” items, create extra room in your house, and have fun doing it. You might be surprised, your old items maybe another person’s treasure. The Internet allows you to sell conveniently from the comfort of your own home. If selling online is something you really enjoy, learn how to sell online part-time. Businesses are constantly looking for online sales support staff and this part time gig can net you a nice supplementary income to support your retirement budget.

Next Steps:

As you can see, making a few simple planning, timing, and lifestyle adjustments can equal significant savings over the course of your retirement. It is never too late to take control of your finances. The sooner you make savings adjustments, the sooner you can get back to living the lifestyle you want — worry free.*

*This article provides broad and general guidelines and does not constitute professional or legal advice. You should not use this article as a substitute for your own judgment, and you should consult professional advisers before making any advertising, tax, legal, financial planning or investment decisions.

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Federation To Protect
Federation To Protect

Written by Federation To Protect

The Federation To Protect is a non-profit organization created with the purpose to provide responsible options to ensure consumers’ trust.

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