Expenses to Ditch When You Retire

Eliminating these costs will improve your retirement finances.

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At first it sounds impossible that you will be able to live off 80 percent of your income in retirement. Why would anything become less expensive after you quit your job and have more time to spend? But there are some costs that you will be able to reduce or eliminate after you leave the workforce. Here are some expenses to cut in retirement.

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A mortgage. Anyone who wants to retire more comfortably should plan to retire their mortgage before they quit their job. You can do this by coordinating the length of your loan with your planned retirement age or simply making extra payments. The only advantage of carrying a mortgage and investing the rest of your money is to try to get a better return than the interest you are paying to the lender. But in retirement, a maximum potential return is no longer the goal. Instead, you need to preserve what you have.

All debt. Additionally, you should plan to eliminate all of your debt, no matter what the interest rate is, before you retire. I know some retired folks who continuously move their debt to various credit cards that carry no interest for a limited amount of time. This strategy allows them to pocket interest on their savings, rather than paying off the debt. But playing the 0 percent balance transfer game could backfire if they forget to make a payment or to move their money before the end of the teaser rate, which makes it easy to wipe out all their gains.

Convenience fees. When you are working, some of your expenses are higher than they need to be because you simply don't have time to figure out how to spend your money efficiently. In retirement, there are no more excuses to not at least try to save money by finding online coupon codes, comparison shopping, and cooking at home.

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Duplicate or useless services. One of the reasons companies love to put you on automatic billing is because many people simply forget that they even pay for some of the services that are on their credit card bill. Everyone should regularly cut unnecessary services out of their budget, especially as they approach retirement. Do you really need a cell phone and a landline? Can you take advantage of a Netflix free trial to ditch cable TV service?

Commuting costs. Retirees can obviously eliminate the costs of commuting to work. Once you no longer need to live near your job you can also move to a place that is closer to family and friends. Relocating sounds expensive, but you will probably save money in the long run, especially if you downsize your home at the same time.

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Financial fees. It's harder to keep track of every account that you have as you age. Try to simplify the number of assets you have and the amount of maintenance you must perform in retirement. Consolidating your accounts can help you to eliminate or at least reduce overdraft fees, bounced checks, and other possible miscellaneous fees that come with having too many financial accounts.

David Ning runs MoneyNing, a personal finance site aimed at helping others change their habits for a better financial future. He suggests that everyone to sign up for an online savings account to get more out of our hard earned money.