Advertisement
insurance

Save Money in Retirement

Here are 12 tips to help you enjoy your golden years without breaking the bank.

Now that you've traded in your regular paycheck, making your money go further is more important than ever.

Here are 12 tips to help you enjoy your golden years without breaking the bank.

1. INVEST WISELY

Resist the urge to move all your nest egg into cash and bonds. Yes, you need to preserve your money. But you should expect to draw on your accounts for as long as 30 years, so you'll need some growth, too. That means new retirees should place at least 50% of their investments in stocks.

Advertisement - Article continues below

Consider taking a portion of what you have in bonds or cash to buy an income annuity that pays a monthly benefit for the rest of your life. The older you are at the time of purchase, the larger the payout.

2. TAKE ADVANTAGE OF DISCOUNTS

Your senior status can save you money at certain movie theaters, restaurants, hotels, car rental agencies, retailers and auto repair shops. Sometimes the discount is only on certain days of the week or on certain items, so it pays to know the rules.

And if a discount isn't advertised, ask if they offer one. Many times they will.

3. DO A TRIAL RUN

It can be tough to know how much money you need to live on in retirement. You don't want to get caught spending more than you can afford. So try living on your projected budget for six months to one year beforehand. Then, once you actually quit your job, monitor your spending to make sure you're on track.

Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

And before you plunk down your savings on a life-altering decision -- such as moving to Florida or buying an RV -- try it before you buy it. You don't want to spend all that money only to find the reality didn't match your expectations.

4. GET OUT OF THE HOUSE

For free or cheap entertainment, meals and social activities, look to your local senior center. Many senior centers offer group classes and trips, or they may negotiate cheaper rates for tickets to performances in your area.

Volunteering is another cheap way to stay socially connected in retirement. Search for opportunities at volunteernetwork.org.

See our guide to saving money on entertainment for more ideas.

5. REEVALUATE YOUR INSURANCE

When you're retired, your insurance needs change. For instance, you aren't commuting anymore so ask your auto insurer to recalculate your rate.

Also, you may be able to drop or reduce your disability and life insurance coverage. These plans are intended to replace your income to support dependents after your death. But you're not drawing a salary any longer -- and probably don't have dependents, either.

6. SELL YOUR SPARE CAR

You scrapped your commute, so do you really need two -- or three -- cars? The average car costs $8,000 a year to own, according to AAA. (That includes gas, maintenance, insurance costs, taxes and registration.) Get rid of your spare car and pocket the savings.

7. GUARD AGAINST CROOKS

Seniors are often targets for scams. According to a 2009 report by MetLife, the annual financial loss of victims of elder financial abuse is estimated to be at least $2.6 billion.

Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

To protect your wallet, never reveal your bank account numbers or other personal info to someone who calls you on the phone or sends you an e-mail. And never assign power of attorney to someone you don't know very well, or don't trust. Learn about more ways to protect yourself.

8. BOOK BARGAIN TRAVEL

Now that you're free from the daily grind, your schedule allows you to travel whenever the best deals are offered. That means taking advantage of last-minute getaways and traveling in the off-season.

See our guide to saving money on travel for more tips.

9. DOWNSIZE YOUR HOME

You'll save money on the mortgage -- and may even be able to buy it free and clear when you sell your bigger house. Plus, you'll save money on utilities, insurance, property taxes and maintenance.

Plus, if you sign a contract to buy a new home by April 30, 2010 (and close the deal by June 30), you may qualify for a $6,500 long-time resident income tax credit.

10. FIND THE BEST HEALTH COVERAGE

If you retire before Medicare kicks in, health insurance can be costly. But don't even think about going without coverage or one major health event could derail your entire retirement-savings plan.

Advertisement - Article continues below

First, if your spouse is still working, joining his or her workplace health plan is probably your cheapest option. If not, find out how much COBRA coverage will cost from your employer (COBRA covers you for up to 18 months). Check with groups, such as AARP or your alumni association, to buy into a group plan. Or shop for your own individual policy at eHealthinsurance.com. Need help? Find a health-insurance agent at NAHU.org.

11. PUT YOUR MONEY TO WORK

Although you're not working, that's no excuse to let your money take it easy. If you're stashing your money in a savings account earning next-to-nothing, you're wasting it.

Make sure you're getting the best return on your cash. Search for the highest yields on CDs and money-market savings accounts. And consider using a free online checking account that pays interest, such as the ones offered by Everbank or ING Direct.

12. CUT THE PURSE STRINGS

If you have been helping to support adult children, now is the time to stop. Without a regular paycheck, giving money to relatives could be hard to sustain.

You need to focus on preserving your money for retirement. Besides, your kids have to grow up sometime, right?

MORE WAYS TO SAVE

Save Money on Debt & BankingSave Money on FoodSave Money on EntertainmentSave Money on Health CareSave Money on Investing and Financial PlanningSave Money on TravelSave Money on Utility and Phone BillsSave Money in Retirement

Advertisement
Advertisement

Most Popular

7 Surprisingly Valuable Assets for a Happy Retirement
happy retirement

7 Surprisingly Valuable Assets for a Happy Retirement

If you want a long and fulfilling retirement, you need more than money. Here are the most valuable retirement assets to have (besides money), and how …
August 3, 2020
Retired? Good Luck Getting a Mortgage, Even If You’re Wealthy
mortgages

Retired? Good Luck Getting a Mortgage, Even If You’re Wealthy

One 70-year-old’s story highlights the challenges. Prepare for more paperwork and hoops to jump through than you could imagine.
August 2, 2020
Turning 60 in 2020? Expect Lower Social Security Benefits
Coronavirus and Your Money

Turning 60 in 2020? Expect Lower Social Security Benefits

When you file for Social Security, the amount you receive may be lower.
July 30, 2020

Recommended

Time for an Insurance Review
Coronavirus and Your Money

Time for an Insurance Review

You may need to update your policies in light of COVID-19.
July 30, 2020
Insurance Question: Say Rioters Destroy My Business, Am I Covered?
insurance

Insurance Question: Say Rioters Destroy My Business, Am I Covered?

If you ask your broker, the answer may be no. But don’t just accept that response. Know what your policy covers, and how to protect yourself.
July 29, 2020
With Interest Rates Near Zero, Annuities Help Pick Up the Slack
annuities

With Interest Rates Near Zero, Annuities Help Pick Up the Slack

What do retirees do with their money when interest rates are next to nothing? Here’s how pulling annuities into the mix can help.
July 23, 2020
Pension or Lump Sum? Compare Payouts and Options Before You Decide
annuities

Pension or Lump Sum? Compare Payouts and Options Before You Decide

If you’re eligible for a pension, congratulations. However, you may be able to do better than just taking what you’re offered.
July 20, 2020