10 Ways You Save
Money When You Retire
by Tom Sightings
June 4, 2013
For many pre-retirees, the prospect
of life without a paycheck is scary. There are no more biweekly
checks, raises, bonuses or promotions. Then experts from financial
firms come along and stoke our anxiety with their sometimes unrealistic
recommendations about how much money we need to have in our retirement
plans (which they will be happy to manage, for a fee) to guarantee
a comfortable retirement lifestyle. Some say we need $1 million
each; others recommend 20 times our last annual salary.
The financial experts are right,
in principle. We do need a lot of money to retire, generally in
the form of Social Security, plus pensions, 401(k) plans and IRA
balances, as well as the value of the help we get from family and
friends. But maybe we don't need quite as much as the experts would
have us believe.
Why? Because after we retire, our
expenses go down automatically. And there are plenty of pain-free
ways to push them even lower. Here are ten ways we save money in
retirement, without adversely affecting our lifestyle:
1. Clothes. You will no longer
need expensive business suits, or uniforms that you have to pay
for yourself. And there's no more need to buy and inventory a closet
full of shoes for every occasion.
2. Commuting costs. We no
longer have to buy a commutation ticket for the train, or pay bus
fare or parking fees. If you drive 20 miles to work every day, you'll
save almost 10,000 miles a year, which at the IRS mileage allowance
of 56.5 cents a mile, equals more than $5,000 a year.
3. Lose a car. If you're no longer commuting, maybe you can
sell off one of your two or three cars, because you don't really
need it anymore.
4. Less insurance. If you get rid of a car, you're not paying
insurance on it. Maybe there are also other insurance policies you
don't need. For example, if your kids are grown, maybe you no longer
need life insurance.
5. Move. You're no longer tethered to your place of work.
So you may have the option to sell your house and move to a less
expensive neighborhood. You don't necessarily have to relocate to
Florida or Texas, either. Sometimes moving 20 miles farther out
from your business hub can save a huge amount of money, mostly in
the price of the house and the real-estate taxes you pay.
6. No more kids. You spend a lot less after your kids have
finished school and moved out on their own, an event that often
coincides with retirement. There's no more college tuition draining
your savings account, no extra car in the driveway and you won't
believe how much you'll save on your grocery bill.
7. Travel. Of course, you can always spend boat loads of
money if you go first class to all the hot spots. But the beauty
of retirement is that you can travel mid-week, when air fares are
cheaper, or go during the shoulder season, when rates are lower.
Your flexibility means you can take advantage of websites offering
alternative accommodations, such as Airbnb or Cyberrentals. And
don't forget, you can always go visit the kids.
8. Entertainment. Don't be embarrassed to use a senior discount
at the movies or a state park or the America the Beautiful senior
pass for national parks. Many state and local governments also offer
discounts to senior homeowners. Take advantage of the flexibility
you enjoy by not having to be at the office from 9 to 5 every day.
Go out to lunch, instead of dinner. You often get the same food
at a much lower cost. Play golf weekday afternoons instead of weekend
mornings, at a lower rate. And check out your community offerings,
from free lectures at the library to free exercise classes at the
9. Now you're the boss. You used to pay for the premium cable
package, because the kids insisted on it. Maybe you don't need that
anymore. Downgrade your cellphone service if you don't use the minutes.
Cancel your membership to the swim club, if you're not using it.
Look through your credit card bill. What are you paying for that
you no longer use? Now is the time to cancel the charges that are
there for your kids, and pare down to activities important to you.
10. Save on saving. You no longer get a paycheck, so you
don't have to tithe to Social Security anymore. You're now on the
receiving end of the program. And, remember, now that you're retired,
you no longer have to put aside 5 or 10 percent of your income to
save for retirement