21 Ways to Cut Expenses in Retirement

You can get by with a smaller nest egg using these frugal strategies.


Slide Show: 21 Ways to Reduce Your Retirement Expenses


Exit expensive cities. When you are no longer tied to your job, you are also no longer tethered to an expensive city with a high cost of living. Consider moving to a locale where your retirement dollars will stretch further. "There are a lot of cities that are much cheaper than the major metropolitan areas," says Young. "When people live in New York or California, you can save a huge amount of money by moving to the Midwest or South." Even moving to a low-cost location in the same state can have some benefits. Look for places with lower taxes, more affordable housing, and plenty of amenities for seniors, such as great healthcare facilities and affordable recreation. 

[Use our online tool to Find Your Best Place to Retire.] 

Travel smart. Many working Americans do most of their traveling during weekends and national holidays. Seniors have the luxury of being able to travel on weekdays and off-peak times and taking advantage of last-minute deals. 

Ask for senior discounts. One of the greatest perks of getting older is qualifying for senior discounts. Some businesses, including Kohl's Department Store and Hyatt Hotels and Resorts, offer well-publicized senior discounts. In other cases, companies provide discounts only to those who ask. Cash-strapped retailers may increasingly be willing to negotiate on price with repeat customers. AARP also negotiates discounts on behalf of its members. 

Find age-related tax breaks. Some states exempt pension income from state income tax. Other locales offer age-related property tax exemptions or deductions. Contact the state department of revenue or a local tax expert to find out about tax breaks for seniors. 

Ditch your land-line phone. Paying for both a cellular phone and a house phone is a redundant expense. Pick out the type of phone service that is most useful to you and cancel the other. 

Get rid of cable TV. Many people are cutting back on the hundreds of TV channels they hardly ever watch. Consider reducing the number of channels you pay for, making do with broadcast TV, or watching free TV programs over the Internet. 

Find free entertainment. Sometimes seniors actually increase their spending on entertainment in retirement because they have more free time. "They have an extra 2,000 hours a year to fill, and it can potentially cost money and you need to be wary of that," says Jill Hollander, a certified financial planner for Financial Connections Group in Corte Madera, Calif. Come up with a plan to volunteer, garden, or play golf before you retire, and try not to take up expensive new hobbies. 

Resist your grandchildren. New grandchildren are money magnets. It's often difficult to resist buying them an expensive toy or top-of-the-line stroller. "On an emotional level, you want to give, but on a financial level, you certainly don't want to become dependent on your children and grandchildren at the end of your life," says Hollander. Instead, offer your baby-sitting services. You'll get to know your grandchildren better, and the parents will appreciate some time to themselves. 

Eat out for less. Seniors are famous for taking advantage of the early bird discounts many restaurants offer to customers who dine before peak dinner hours. "Share meals at a restaurant and go to happy hours," recommends Young. Also, bring your own wine to establishments that don't charge a corkage fee. And consider filling up at home and purchasing only appetizers or dessert. 

Learn to cook. Busy employees often don't have time to linger over meals, and many lunches and dinners are rushed and thrown together. But home-cooked meals often taste better and are more budget-friendly than convenience food. Invite a few friends over and make preparing a meal together part of the evening's entertainment. 

[See The High Cost of Growing Older.] 

Buy used. Almost all consumer goods, including books, DVDs, and furniture, can be purchased used for a fraction of the retail price. Sometimes you can even afford higher-quality products if they were first lightly used by someone else. Check out online message boards, auction sites, and community bulletin boards before making your next purchase.