How to Have a Frugal Retirement
In order to retire, you need to have an adequate income or resources to provide an income to meet your expense needs. For some, even the most diligent planning and diligent saving may not be enough to provide a lavish retirement. This doesn't mean you can't retire or need to go back to work. Instead you may need to reevaluate your lifestyle and find a way to live more frugally. This can accomplished by anyone willing to make changes to an existing lifestyle.
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Instructions
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Evaluate your expenses. If you have not yet retired, this may be anticipated expenses. Be sure to include property tax, car registrations and other annual expenses with your basic monthly expenses.
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Look for areas that seem indulgent or excessive. If both spouses are retiring, two cars may be a luxury rather than a necessity.
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Prioritize the things in your budget that are most important to your enjoying retirement. While high-speed Internet may be a luxury, you will be spending more time at home and may have hobbies that lead you online frequently. Conversely, you may not need to spend as much money on clothing anymore since you won't need an elaborate work wardrobe.
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Use a retirement calculator to estimate your retirement income from defined benefits plans and supplemental retirement programs. There are many free online calculators such as the one at CNN.Money.com.
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Determine whether your retirement income can comfortably support your budget.
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Remove non-priority items from your budget one by one, lowering your monthly expenses. Re-evaluate as needed.
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Commit to lifestyle adjustments that reduce expenses. This may mean moving to a less expensive community or smaller space. It may mean selling the home to buy that sailboat you always wanted and living on the boat. Downsize your car to something that gets you around and use a bus pass when you aren't in a rush to get somewhere, saving gas costs and reducing insurance costs.
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Eliminate as much debt as possible prior to retirement. Debt means you're paying someone interest. Frugal living in retirement means saving until you can afford to pay cash for whatever it is you want.
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Cut newspaper and circular coupons and ask for "senior discounts" at restaurants and movie theaters.
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Stick with your budget, game plan and lifestyle commitments.
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Tips & Warnings
Talk to a financial or tax adviser about ways to maximize your investment returns conservatively and reduce any tax bills you have.
The AARP has wonderful resources for seniors to help stretch retirement dollars.
References
- Photo Credit retirement image by easaab from Fotolia.com
