Eight tips for saving during retirement
Yes, we should certainly begin to save before retirement. But saving during retirement can be helpful and important too. Exercising some financial discretion and frugality during the first few years of retirement can compensate for saving that might not have happened before retirement, or a nest egg that was shrunk by the 2008 economic meltdown and subsequent recession.
Here are tips to help new retirees continue saving even after you’ve left the work force:
- Take advantage of senior discounts: Senior discounts may seem trivial, but we’ve all envied them at one point in our lives. While any single discount won’t amount to much, habitually taking advantage of these discounts will lead to significant savings in the long-term.
- Downsize your home: Are you still living in the family home where you children were raised? Is your home bigger than it needs to be? Consider downsizing and moving to a smaller more home. A smaller home is not only more affordable, it requires less maintenance and upkeep which gives your more time to enjoy yourself during retirement.
- Make energy saving improvements: Retirees typically spend more time at home than workers, so factors such as heat and energy costs impact them more than ever. Making a home more energy efficient takes an upfront investment, but such changes often pay for themselves quickly in the form of reduced heat and electric bills. What’s more, some locales offer grants to lower income people and seniors that can help offset the costs of making a home more energy efficient.
- Be a bargain traveler: Just because you are trying to save during retirement doesn’t mean you should give up on your dreams to travel. Become a budget traveler and get the best of both worlds. The best deals on airfare, lodging and even cruises are frequently found at the last-minute. Now that you don’t have a 9-5 to hold you down, you are finally free to take advantage of the immense savings you can find if you are flexible about your travel plans.
- Watch out for scams: Seniors are scammer’s number one target. Such fraudsters separate seniors from more than $2.5 billion dollars per year according to a report by MetLife. Seniors should learn to avoid fraud to prevent their retirement savings from being tapped by swindlers.
- Sell extra cars: Retirees can pad their savings by selling extra vehicles. Retirees who do have an extra car to sell shouldn’t delay, as each year that passes decreases their car’s value.
- Reassess your savings and investments: Take a deeper look at your savings and investments that you have made, ideally with a trusted professional. A retiree’s nest egg should be neither too cautious nor too risky. Investing too cautiously can cause your nest-egg is to shrink due to inflation. (If your nest egg is in cash and bonds and grows 2% annually, while inflation is 2.5% annually, your nest egg is actually losing value). On the other hand, investing carelessly can mean one bad day for the stock market knocks out a big chunk of your savings. See to it that your savings match your plans and goals, and that your portfolio is carefully balanced.
- Examine insurance options: Some types of insurance such as life insurance and disability insurance are designed for workers rather than retirees. If you have these types of insurance, determine whether you still need them. If you no longer have dependents who rely on your income, perhaps you can cash in a life insurance policy and cancel your disability insurance. That said, it’s recommended that you keep any long-term care insurance they may have, which can be a godsend for retirees who eventually need senior care.
To read more of Jeff’s articles, visit his page on A Place for Mom.
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