How to use this tool
How to use this tool
Cutting Expenses after Retirement
by Roger Wohlner (Write for us!)
(Click on the links within the article to get definition of that word)
(Click on the links within the article to get definition of that word)
Accumulating the funds necessary to support yourself
during retirement, a period that could easily span 20 to 30 years, is no easy task. But how much you need to accumulate is directly tied to your expected expenses during retirement. Go through your expected retirement expenses on an item-by-item basis. The key is to look for ways to reduce your expenses without reducing your standard of living. Consider these items:
- Pay off your mortgage.
Mortgage payments often consume 30% or more of an individual's gross income. Eliminating this expense can drastically reduce income needed for retirement. If you can't pay off your mortgage, consider selling your home and purchasing a smaller one for cash. Not only will you eliminate the mortgage payment, but a smaller home often results in lower utility bills, property taxes, and maintenance costs.
- Get rid of other debts.
It's not unusual for consumer debt payments to equal 10% to 20% of an individual's take-home pay. Try to enter retirement debt free.
- Keep your automobile.
Instead of purchasing a new car every couple of years, keep your current car for as long as it's in good working order. That will eliminate car payments from your retirement budget.
- Look for ways to reduce travel and leisure expenses.
Look for and use senior discounts. Plan activities for non-peak times, when rates may be lower.
- Consider relocating.
The cost of living varies significantly from city to city and state to state. You may be able to reduce your living expenses substantially by moving to another locale. However, this is more than a financial decision. You also need to decide whether you want to move away from friends, family, and familiar surroundings.
Email this Article
Print this Article
Cite this Article
Other Suggested Articles
Withdrawing Retirement Funds >
Flipping the Switch to Retirement >
Thinking of Working During Retirement? What You Should Know to Avoid Tax Pitfalls >
Where to Spend Your Retirement Years? >
Retirement Income Plan >
Other Articles By This Author
Evaluating Potential Stock Investments >
Your Children and IRAs >
So What Will You Do in Retirement? >
Extending Your IRA's Life >
Coming to Terms with Stocks >
Are Defined-Benefit Plans Extinct? >
Make Your Resolutions Work >
Consider a Conversion >
The Basics of Credit Scores >
Measuring a Stock's Risk >
Article reprinted with permission. Unauthorized reproduction of this content is prohibited.
Click here to license InvestorGuide University content.
Click here to license InvestorGuide University content.
