This is a collaborative post by Rosana with retirement tips.
No matter how well prepared you are for your retirement, reducing your expenditure can help you to do the things you love. Whether you plan on spending your retirement with loved ones or traveling the world, saving money on the essentials gives you the freedom to enjoy your retirement on your own terms.
With an aging population in the U.S., more people than ever are preparing for their retirement. With any luck, you’ll have a 401(k) or a SEP IRA to fund your senior lifestyle. However, you don’t want to waste your money on unnecessary expenditures. With these handy tips, you can reduce your outgoings and cut your costs as you approach retirement:
1. Calculate Your Income
If you’ve been saving or paying into a retirement plan for years, you may think you have a good idea of what your retirement income will be. In reality, the value of these plans can change, particularly if they’re index-linked. If you haven’t checked recently, be sure to find out exactly what income you will receive upon retirement.
Once you know what your income will be, you can determine how much of it will go towards essentials and how much disposable cash you’ll have to enjoy. A successful budget relies on accurate figures, so take the time to go through your paperwork and figure out how much you’ve got coming in.
2. Contact Utility Companies
Once you hit the ‘Big 5-0’, you’ll be surprised at the discounts you’re entitled to. Essential service providers, like utility companies, often have schemes, plans, and offers aimed at people aged 50+. These can be a great way to cut the cost of your essentials, so don’t hesitate to ask if you’re eligible.
Alternatively, monitor your utility usage with a smart meter and find out if there are cheaper ways to pay for your fuel. If you’re on a fixed tariff, for example, a variable alternative may reduce your average monthly bills.
3. Get AARP Insurance
Whether you use your car for the weekly grocery shopping or you’re planning a cross-country road trip, you won’t want to pay more than you have to for insurance. Fortunately, AARP auto insurance makes it easy to secure a bargain. Designed for people 50 years and older, you can obtain a comprehensive policy with tons of extras for a reduced price.
Choosing a car insurance policy that’s specifically designed for people in your age group can save you a significant amount each year. As insurance companies use up-to-date accident statistics to set their prices, this can benefit older people. With most traffic accidents involving people under the age of 30, taking out an AARP insurance policy enables you to access lower premiums and charges.
4. Delay Drawing Social Security
If you don’t need to take your social security benefits as soon as you retire, you could benefit by waiting a little longer. If you were born in 1943 or later and you delay taking your social security benefits, they’ll increase. In fact, they could increase by up to 8% for every year you delay taking them up to the age of 70!
However, do bear in mind that the rules and regulations regarding drawing your social security benefits can change at any time. Due to this, it’s important to determine what the rules are at the time you retire and make your decision accordingly. If in doubt, you may want to seek independent financial advice in order to gain more information and plan your retirement finances.
5. Sell Your Property
If you live in a large family home, you may want to reduce your outgoings by downsizing to somewhere smaller. Perhaps your kids have grown up and moved out? Maybe you don’t want the hassle of maintaining a large home anymore? Whatever the reason, moving into a smaller home can save you a significant amount.
As well as releasing some equity and getting a capital sum to save or spend, you’ll spend far less maintaining a 2-bedroom home than you would on a 4 or 5-bedroom property. From heating bills to landscaping, the cost of running a smaller property could be a fraction of what you’re currently spending.
6. Vacation for Less
If you’ve always dreamt of traveling the world, your retirement gives you the freedom and opportunity to do just that. With some savvy vacation-planning, you can slash the cost of your adventures too. In the same way that auto insurance packages for over 50s are cheaper than standard plans, dedicated travel insurance for seniors can be low cost also.
In addition to this, you can cut the cost of flights and airfares by traveling out of season. As well as saving you a considerable amount of money, vacationing out of season means you can enjoy popular tourist spots when they’re less busy and crowded.
Start Planning Your Retirement Now
It’s never too early to start planning for your retirement, so don’t hesitate to start financing your future. By paying into retirement savings plans from an early age, you can build up a sizable nest egg by the time you’re ready to retire.
However, if you’re already approaching retirement age and you don’t have a plan set in stone, there’s no need to panic. By checking what employee pensions you’re part of, accessing your 401(k) or SEP IRA documentation, and looking into your social security or public benefits eligibility, you can find out exactly how much income you’ll have in the future.
What’s more – having your assets valued will give you an idea of what capital you could access if you need to. If you’ve got stocks and shares, for example, cashing them in might boost your retirement fund and let you live the lifestyle you’ve always dreamed of.
With the right planning, you can spend your retirement doing the things you love, so why wait? Start preparing now, and you’ll have endless adventures to look forward to when you’re eligible to retire.