4 Ways to Slash Your Spending After Retirement

By on December 30, 2015
4 ways to slash spending after retirement

A large part of successful retirement is learning the art of downsizing — in other words, getting more for less. Most retirees live on a fixed income that has to stretch. Finding ways to cut your expenses will allow you to use the money you do have more productively. Consider some practical ways you can tighten the purse strings after retirement and save.

Smaller Living Space

It is hard to give up the family home, especially if your kids grew up there, but proper downsizing begins with your living space. After the kids move on, there is no reason you need a three or four bedroom home. That is just more rooms to clean, and you must pay to heat and cool that large space. A smaller apartment means lower utility bills and easier annual HVAC maintenance

Image via Flickr by Kellogg

The smart choice is to sell and buy something smaller that is easier to keep up. Even if you have rented your whole life, retirement allows you to look for a smaller apartment. You can take advantage of retirement communities, too. They often set rents based on income and allow you to meet new people who are the same age.

Review Your Expenses

The next logical step is to check your monthly expenses and see what you can do without. Over the years, people build up habitual spending routines. For example, automatic renewals of professional organizations can cost hundreds of dollars a year, but if you are no longer working in that industry, do you need the membership? Participants in a survey conducted by T. Rowe Price stated they spend around 66 percent less after retirement. 

Review your regular charitable contributions, too. If you can afford to keep giving, then that’s fine, but you might want to cut down on contributions to accommodate your new life.

Investigate Your Transportation Needs

Consider whether the cost of a car is really necessary, given you don’t go to work anymore. Look at the mass transit options in your area and delivery services. Do the local grocery store and pharmacy deliver to your door? Many communities offer transportation to seniors for free or at a smaller cost than that of owning a car. Without a vehicle, you save on gas, renewal fees, insurance, and maintenance bills.

Delay Social Security Payments

You can get Social Security at 62, but it pays to delay getting the payments. If you take your benefits early, the agency reduces the checks by 20 to 30 percent. Instead, live on your taxable income first. Avoid withdrawing from 401(k)s and IRAs until necessary to avoid the tax bill, too.

They call it the golden years for a reason; make the most of your retirement by learning to spend less. That will mean less stress and more energy to do all the things you have spent your life putting off until you retire. 

(Photo credit: Wikipedia)

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4 Ways to Slash Your Spending After Retirement