Living on a fixed income after retirement means learning to adjust to a new way of handling your finances. Here are some tips on ways to literally get more bang for your buck in retirement and to ensure you don’t fritter away the money you have.
Dining Out. The option to just “get lunch somewhere” can be a tempting proposition now that you aren’t stuck in your 9 to 5, but it can also be a slippery slope. Eating at restaurants can quickly become a habit — and an easy way to waste money. To make a profit, restaurants charge about a 300% markup on the items they serve. It follows that cooking at home for most of your meals can save you a ton of money, and it will be better for your health as well. (Restaurant meals typically contain much higher amounts of sodium, saturated fat, total fat, and overall calories than home-cooked meals.)
Bucket List Vacations: Many people retire and proudly boast about finally having the freedom to travel. But if those travel plans weren’t budgeted into your retirement portfolio, you might find that your dream trip to Europe is still a reach.
It’s important to plan your trips strategically. Consider traveling to places in the off-season, when airfares and hotel reservations are cheaper. Book cruises at the last-minute to take advantage of ships trying to fill spaces. And it’s a great time to look into local getaways that you can drive to.
Senior Discounts: While it seems counterintuitive, not everyone takes advantage of the many senior discounts available. Even if it’s only a few dollars at a time, saving on things like travel, movies, museums, and restaurants can add up quicker than you think. All it takes is a bit of prior research, or just asking about it when you’re there.
Boredom Spending: Raise your hand if you’ve ever gone shopping somewhere “just to get out of the house.” Yeah, it happens, and that’s okay! But just like dining out too frequently, if “retail therapy” becomes a habit it can get you into trouble quickly. If you find yourself wanting to buy things just for the temporary boost of serotonin it’s time to look into a new hobby, pronto.
Subscriptions: These can be a big money-waster, no matter what stage of life you’re in. With so many services requiring a subscription, it can be easy to lose track of what you’re paying for. Regularly go through your itemized bills with a fine-tooth comb and cancel any subscriptions that you’re not really using.
Double-Check Fees for Medical Care: Obviously, medical care is a must. But have you taken the extra steps to ensure you’re not getting overcharged? Always request an itemized medical bill to make sure you aren’t being incorrectly charged for a medical service or procedure. (This happens. A lot.)
Insurance: Insurance is tricky: too much and you’re wasting money for coverage you may never need. At the same time, too little insurance can be its own disaster. Everyone’s personal circumstances will call for different coverage, but be sure to review them regularly to make sure you’re getting the best rates possible. Try to periodically shop around for car insurance, for example, and ask if retirees or low-mileage drivers are eligible for discounts.
Social Security Benefits: Collecting your Social Security benefits too early can cost you a pretty penny. After “full retirement age,” which depends on your birth date, you can start receiving “delayed retirement credits,” i.e.: more money. That amount will go up each year until the age of 70, so if you can wait until then you can get up to 30% more benefits.
It’s also really important to make sure you know all the loopholes in Social Security claims. For example, if your spouse passes away when they are over the age of 65, you could collect their Social Security as long as you’re still working. Then, when you retire you can choose the higher of the two Social Security payments to receive for the rest of your life.
Cell/Cable/Utilities: When was the last time you looked into the details of your cell phone data plan? Or how much you’re paying for cable and streaming services? Providers of these types of services are continuously offering deals and discounts to keep customers happy, and all it takes is a phone call to customer service to make sure you’re taking advantage of their position. Make sure you’re not paying for data you never use, for example. Or a movie channel package that you never really watch. It’s also important that you keep track of any sneaky price changes they might have implemented. (More tips on saving money on your cell phone bill here, and cable/internet costs here.)
As for utilities, make sure you’re following all the tips for reducing your electric bill by going eco-friendly.
Choices Have Consequences
Continuing to Financially Support Adult Children: We know this is a sensitive issue, so please join us in a judgment-free zone for a moment.
There. Okay. Now, we all know the economy has been a challenge. We have read the articles about how impossible it is for younger generations to buy a home, or even try to build up savings. These are real concerns, and real hardships that your adult children might be facing. We’re not negating any of that. But if you’re regularly paying recurring bills for your adult children, like rent, car insurance, or even just keeping them in your “family plan” for cell service, you’re dipping into your own limited resources to do so.
Temporary help is obviously a different scenario, but shouldering a large part of your adult child(ren)’s financial burdens can be disastrous for everyone involved if you aren’t extremely careful.
Home Improvements: It has kind of become a trend that people embark on a journey of various, large-scale home improvements when they retire. This isn’t necessarily wrong, but you need to make sure whatever you do fits into your retirement budget. Home improvement projects are notorious for added and unexpected costs, so if you’re already walking a narrow line, you may want to reconsider.
Not Downsizing: We’re not here to tell you that you have to downsize, just that it’s something to consider. Housing is expensive, and if you’re paying taxes and a mortgage on a massive 4-bedroom just so your kids have somewhere to stay when they visit might not be worth it. Saying goodbye to your family home can be heart-wrenching, yes, but if you’re pinching pennies, downsizing can make a huge difference.
Other Articles You Might Enjoy: