There are a lot of things that are difficult to control when it comes to retirement. We can’t control stock market returns, the meteoric rise of medical costs or the yearly increases in Social Security payments.
We can, however, control our spending. Whether you are already retired or planning for retirement, there are ways to save money without significant sacrifice. These five options are easy ways to save some serious dough during retirement:
1. Choose your location wisely. Settling down for retirement in the right location can save you money automatically. A location with a lower cost of living will reduce expenses on everything from housing to food to entertainment, lowering your retirement costs. There are several United States cities, including Albuquerque, N.M., and Knoxville, Tenn., where retirees can live well on $40,000 a year or less. Tennessee also offers the advantage of no state income tax. Alternatively, you could live on even less if you retire overseas in one of these 18 countries.
2. Downsize as much as possible. Maintaining a large family-style home isn’t personally or financially smart for many retirees. Even if your home is paid off, you’ll have more maintenance expenses, taxes and insurance with a larger home. Plus, if you have equity built up in your home, selling your current home to buy a smaller, less expensive home could put money back in your pocket or retirement accounts. Selling the family home can be an emotional decision, but this step could put you in a much better retirement position.
3. Shop around for insurance. You may be able to trim your expenses by shopping around for new insurance. For instance, talk to your auto insurer about recalculating your rate, since you’re likely driving much less on a daily basis than you were during your working years. Another insurance area to re-evaluate: life insurance. If you don’t have much debt, you may be able to seriously reduce, or even get rid of, your life insurance coverage.
4. Become a one-car family. These days, it’s typical for an American family to have two or even three cars. In retirement, however, you probably don’t need more than one car. If your spouse or partner is still working, getting by on a single car shouldn’t be more than mildly inconvenient. Even if your vehicles are all paid off, it can cost thousands of dollars a year to own and operate a car – about $8,900 per year for your average sedan, according to a AAA study.
5. Keep a list of available discounts. Restaurants, travel agencies, retail stores and many other institutions offer senior discounts, and you could save a lot if you get in the habit of using these discounts when they’re available. Get familiar with senior discounts in your hometown, and keep a list of discounts and the days on which they’re available. You may not want to structure your entire life around senior discount days, but choosing wisely when to go out to eat, book travel and buy new clothes could really save you money throughout your retirement years.
Rob Berger is the founder of the popular personal finance blog, the Dough Roller, which covers personal finance and investing topics that help people build lasting wealth.