Another great guest post from Paul, a fellow member of Carolina Blogging.
My parents retired just a few years ago. They are very planned people and handed down their knack for frugality to me. What was great is that they were very open with me and my siblings on how they were going to adjust to a lower income.
Living on a fixed income can be a difficult transition for some retirees, but I learned several simple strategies anyone can use to make a retirement nest egg last longer.
Find ways to save you the things you love
Even though you are living on a limited income doesn’t mean you’ll have to quit doing the things you love, you’ll just have to find cheaper ways of doing them.
For example, if you enjoy golfing, go during times that have cheaper green fees. Typically golf courses lower their rates in the middle of the weekdays. You can enjoy the same amount of golf for half of the cost. If you enjoy going to the movies, matinee movies are usually half the price of a normal movie. If you ask for a senior discount, you can save even more. Hobbies are expensive, buy your supplies used or at discount stores. You can buy qualities used items on Amazon, Craigslist, or EBay. Or better yet, use your hobbies to make extra cash so they can support themselves without cutting into your budget.
Review your expenses, drop what you don’t need
Now that you’re retired, those things that used to be important might not be at the top of your priority list anymore. Things like cable or satellite television, gym memberships, or any club membership might not impact your life as much now that you are enjoying retirement.
Retirement is a good time to review all of your insurance policies. Many retirees decide that it’s no longer necessary to carry a life insurance policy or to get a smaller policy amount.
If you decide you no longer need a typical life insurance policy, you can purchase a final expense insurance policy instead. With a final expense policy you can get the coverage you need for your family to afford all final expenses, but it won’t drain your retirement savings. Final Expense policies typically have a $10,000 or more payout that will cover the cost of a funeral, but these policies have much lower monthly premiums.
Downsize your home
Your kids have moved out, and you know have three bedrooms that have been converted into storage units. Retirement is the time to consider selling your house to downsize to a smaller one. Having a smaller home can reduce or eliminate your mortgage payments, decrease maintenance costs, and decrease heating and cooling bills. Deciding to sell your home can be an emotional decision, but it can save you thousands of dollars each year.
If you decide to sell your home, there are a few tips to maximize what you can get out of it. You don’t have to invest thousands of dollars or hours to get the most out of your home. Before you try and sell your home, spend some time increasing the “curb appeal” of your home. The first impression is the most important moment in selling your home. Spend some time painting window shutters, front doors, replacing light bulbs, and cleaning up the yard. When someone is coming to look at your house, try cleaning out half of your closet to show the potential buyer all the available space.
Don’t forget about the costs associated with selling your home. You’ll spend around 2 – 5% the cost of your house on closing costs. If you plan to use professional movers, be sure to consider those costs before you move.
Evaluate Your Car Situation
Now that you’re retired, your family probably doesn’t need two or more cars. With your spouse and family, discuss the possibility of selling one of your cars. You can pocket the money from the car and enjoy the freedom of not having monthly car insurance payments. If selling one of your cars doesn’t work for you, think about trading in your car for a practical vehicle with great gas mileage. Also, consider using one of your cars for most of your driving so you can apply for a low mileage discount on the insurance for the other vehicle. Chris Long from Longevity Insurance Brokers tells us, “The low mileage discount is very advantageous. It can save you as much as 40% off your current auto insurance.” If it’s available, taking public transportation can save more money on your gas budget.
While my parents have actually done all of these, just implementing a couple can make a big difference in your finances and make living in retirement much less stressful.
- Sell Your Life Insurance
- When Should You Notify Your Insurance Company That An Accident Happened?
- How To Protect Your Most Valuable Investment
- The 3 Keys To Getting The Best Value On Your Car Insurance
- 10 Things You Need to Know About Car Insurance
- So, Where Should I Call Home?