4 Ways to Reduce Retirement Expenses

In retirement, you are often on a fixed income and may be looking for ways to reduce retirement expenses. Food, gas and taxes are constantly increasing while your income stays stagnant. Every little bit counts, and often some big changes are needed in order to keep your expenses comfortably below your income. Implementing cost saving strategies can help keep your budget on track, and also allow more money for traveling and recreation.

Downsizing

Downsizing your home can be a huge money saver. You likely have a home large enough for a family, but now less people are living in the home. If you live alone or with your spouse only, you can probably be comfortable in a smaller home. Not only do  you have to pay for the mortgage on a large home, but you have to pay for repairs and upkeep, furniture, gas and electric. You may also have lower property taxes witha  smaller, less expensive home. Plus, homeowners insurance premiums will be lower. You will not only save money by downsizing your home, but you will save time cleaning, repairing and maintaining a large home. It can be a very wise financial move to purchase a smaller home or condo.

Selling Your Car

If you and your spouse each own a car, but both are in retirement, then you probably only need one car. Sell the one car, and then invest that money that you make into a Roth Ira or a mutual fund account. You can save on insurance, gas and maintenance. If your car is paid off, you may want to reduce your insurance to only liability coverage. Plus you can spend more time with your spouse and walk and bike ride more! If you live in a city you can take advantage of public transportation.

Health Insurance

If you are retired and over 65, then you need to sign up for for Medicare. Even if you have insurance as part of your retirement plan, you could have Medicare also. This will allow more bills to paid in full between both plans. If you are retired but not yet old enough for Medicare, you may want to consider a part time job that will offer benefits so your insurance premiums will be cheaper.

Relocating

Some states are great for retirees, while others can drain you financially. New Hampshire has very low income tax, Delaware has no sales tax and low property taxes, and Pennsylvania does not tax your pension. These are just examples of the perks certain states offer. Low income taxes can be great for pretax retirement plans like a 401K that you are going to withdraw from. Low property taxes are an advantage on a fixed income. Also, consider benefits like public transportation, free community activities and museums.

blog comments powered by Disqus