Going into retirement is an exciting time and a chapter in life that comes with its unique share of challenges. One of the biggest challenges is adapting to a fixed income.
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Retirees will need to make careful money moves to make sure they are spending their limited inflows wisely and not on purchases that can increase spending. Here are some helpful ways to reduce your retirement costs.
Create a spending plan
It’s hard to start cutting costs if you’re not sure what is driving up spending. In addition to calculating monthly expenses with the help of a budget, creating an expense plan can help retirees keep track of current expenses.
An expense plan allows retirees to review expenses line by line. This helps determine which expenses will increase during retirement, such as travel, or decrease, such as work-related expenses. Once you’ve created a spending plan, use the next few months to track and see if your actual spend matches the structure. Retirees who see a big difference in spending rising or falling can update their expense sheets accordingly.
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Keep an eye on spending losses
Spending losses are quite common in retirement. This is where a retiree can spend too much, such as giving gifts to family members or even organizations like an alma mater university.
Retirees need to be wary of discovering their spending losses. Once they find out where there are losses, they can identify where budget caps are needed and better determine which items to prioritize in a retirement budget. For example, retirees who financially support children or other organizations may need to have a conversation together about changes in gift giving. This allows them to better establish boundaries with family, friends and organizations.
Re-evaluate your life situation
One of the biggest benefits of retirement is being able to experience greater flexibility where you live. If you used to live in a big city to ensure closer proximity to your workplace but don’t have to worry about commuting since you retired, now is a great time to reevaluate your life situation.
Can you downsize your current home and move to a smaller space, like an apartment building or duplex? How about moving to a low cost of living area, like another city in the same state? Or, have you thought about moving out of state? As you reevaluate your life situation, you may find that you can quickly cut costs by selling your home or even using house hacking such as renting rooms or vacant spaces in your home that are no longer in use.
Do a part-time job
In addition to reducing costs, such as downsizing the home or eliminating excessive monthly expenses that no longer benefit the family financially, retirees may consider finding and working part time. If it’s not a part-time job, explore the options of the secondary hustle and bustle. For example, a retiree may decide to freelance as a consultant. This allows them to set flexible hours, work with customers they are passionate about, and use their years of experience within a given industry.
Part-time work is also beneficial for retirees as it allows them to explore a job they enjoy while also increasing their retirement savings. This helps make sure you save less and allows you to increase your overall income.
Use senior discounts
Now is the time to reveal your age so you can receive senior discounts.
Retirees and people turning 50 can sign up for an AARP membership. This gives seniors and retirees access to member discounts, products and services. You may be able to apply specific discounts to groceries, meal delivery services, and online gift retailers. Not sure if a seniors discount is available? Ask the facility you are in to find out and enjoy the extra savings that come with being in your early years.
Meet a financial advisor
Retirees who are still unsure of the best ways to cut costs in retirement may consider seeking advice from a trusted financial advisor. A financial advisor or planner will be able to review your financial plan with you and offer you another set of eyes to determine if there are any costs you may not have noticed where you can strengthen.
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This article originally appeared on GOBankingRates.com: 6 Ways Retirees Can Cut Costs
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