Guest blog post by Karen Weeks!
Image via Unsplash
9 Easy Ways to Save Money and Live Well in Retirement
When you imagine living on a fixed income, what do you picture? If cutting coupons and pinching pennies is what springs to mind, it’s time to rethink what living on a fixed income looks like. While most retirees aren’t living in the lap of luxury, there’s a lot you can do to stretch your retirement dollars and keep enjoying yourself long past 65.
3 Ways to Cut Housing Costs in Retirement
Housing is the single biggest expense in the average retiree’s budget, making this the first place to focus on cutting costs. Here are three ways seniors can slash their housing costs.
Refinance your mortgage
Mortgage rates have been on a steady decline for years. Today, they’re at an all-time low, making this a fantastic time to refinance your mortgage. When you refinance, you replace your old mortgage with a new loan that has lower rates and, in turn, lower payments. Refinancing does come with closing costs, however, so it’s best for homeowners who plan to stick around for several years.
Downsize
Refinancing is great for seniors who want to stay put, but what if your home is no longer right for you? Downsizing lets seniors buy a home more well-suited to retirement living while saving money on the mortgage. Just keep in mind that a smaller home doesn’t necessarily equal a smaller payment. To maximize savings, pay attention to the cost of living wherever you move.
Get a roommate
While not the most conventional choice, getting a roommate is a smart move for older adults. Not only does a roommate give seniors someone to share the bills and chores, it also fights isolation in the later years.
Smart Spending Habits for Seniors
Reducing housing expenses can add hundreds of dollars to a senior’s budget, but it’s not a free pass to spend as you please. Watching your spending in retirement is the key to making your savings last.
Shop around for services
Don’t stick with the same insurance company or phone provider out of habit. Shopping around can save seniors money on many of the services they use every day. Don’t forget to ask about senior discounts!
Set a fun budget
It’s not only essential spending that seniors need to keep an eye on. Now that you have ample free time, it’s easy to go overboard on discretionary spending. Make a budget so you know exactly how much you can afford to spend on entertainment, shopping, and travel.
Don’t overspend on kids and grand kids
You want to make sure your kids and grandchildren are taken care of, but putting the next generation’s needs before your own is a costly mistake. While it’s fine to give family a hand, know where gifts fit into your budget before giving them.
How to Grow Your Income After 65
If you didn’t save enough for retirement, these tips might not be enough to close the gap between your income and expenses. Instead, you need ways to keep earning money into your senior years. That doesn’t have to mean logging 40 hours a week at an office job, however. These are three options for increasing your retirement income.
Delay Social Security
The older you are when you start receiving Social Security benefits, the higher your payments. For each year adults delay taking Social Security after age 62, benefits increase up to 8%.
Pick up a side hustle
If you can’t keep up with a full-time job, consider a side gig to supplement Social Security benefits. Working part-time for even a few years extends the life of your retirement savings.
Apply for a reverse mortgage
Unfortunately, staying on the job isn’t an option for everyone. Seniors who need financial relief but can’t work can apply for a reverse mortgage. Reverse mortgages give seniors access to their home’s equity while still living in it. Used wisely, it can be a smart way to stretch retirement dollars.
You don’t have to give up the things you love to save money in retirement. By tweaking your budget in areas that make the biggest impact, you can cut expenses while continuing to live well.