6. Avoid investment fees. Administrative, investment, and transaction fees erode your nest egg over time. For example, paying an annual fee of just half a percent of your account balance can reduce the purchasing power of your savings at retirement by one-eighth over a 30-year career, according to the Center for Retirement Research at Boston College. And even after you stop contributing to your retirement accounts, many of the fees continue. “Go to the Web site and look up the expense ratio on the funds you have available. You can sometimes cut your expenses by 75 percent or more,” says David Loeper, president and CEO of Wealthcare Capital Management and author of Stop the Retirement Rip-off: How to Avoid Hidden Fees and Keep More of Your Money. Consider lower-cost mutual funds. “You can have a globally diversified portfolio covering all risk parameters for less than 75 basis points. That should be the absolute maximum," he says.
7. Find more affordable housing. Slashing your housing costs can give your nest egg a quick boost. Raymond Branz, 77, sold his 2,200 square-foot home on Florida's Marco Island and moved to a condo in Naples shortly before he retired from the real estate business in 2000. “We sold our home for twice what we bought the condo for,” he says. In many cases, there's little reason to hold onto a large house once the children move out. Also, consider moving to a low-cost locale in the States or even abroad where the cost of living and taxes are lower.
An increasing number of retirees are living with their adult children, which can cut costs for both generations. You can provide affordable (or no-cost) childcare for your grandchildren, and you'll also have more people to assist with eldercare should you need it. Fanchone Myers, 66, a Spanish teacher in Malakoff, Texas, moved into a separate building on her adult son’s property about a year ago and now spends much of her free time with her three-year-old grandson. “We go fishing at a pond and that doesn’t cost much,” she says. “He can cast really well and reel them in too. That’s my entertainment.”
8. Cut transportation costs. Branz and his wife downsized from two cars to one since they no longer to commute to work. “Since I retired, my schedule is the same of my wife’s,” says Brantz. Sometimes retirees even go car-less. Some cities have free or low-cost transportation options for seniors, such as the AppalCart Transportation Authority in Watauga County, N.C., which transports residents age 60 and older to senior centers, doctor’s offices, and grocery stores free of change. Car-sharing services like Zipcar are another option.
9. Prioritize spending. When Dennis Mogel, 61, was laid off by an oil company 13 months ago, he began buying groceries in bulk from Sam’s Club. He also cut back on trips, and plans to forgo his season tickets to the theater in Philadelphia next year. “Over the winter, we had a lot of soups my wife made as a way of cutting down,” says Mogel, who now works part-time from home as an Internet marketer in Levittown, Pa. Like him, a whopping 71 percent of Americans age 50 and older have cut back on spending in the past year, according to a recent AARP survey. Coupons, early-bird specials, and senior discounts are sure to be part of any frugal retirement plans.
10. Comparison shop senior discounts. Getting discounted passes to movies and museums and 10 percent off merchandise at your favorite store is one of the great perks of getting older. But just because something is called a senior discount doesn’t mean it’s the best deal. A recent southwest.com search for a one-way senior fare from Washington, D.C., to Los Angeles yielded a $204 ticket. Meanwhile, the cheapest seat on the same flight (listed next to the senior fare) was $119. And a query for a hotel room in downtown Chicago found that the best available senior rate was $165, while the best available overall rate for the same night was $152.95.