We see it every year – a worker retires and immediately seeks methods to make their savings last as long as possible. With limited earning opportunities, the only solution is to reduce expenditure. With this in mind, we have four tips for those who want to reduce the amount they withdraw from retirement savings every year!
1. Reconsider Your Vehicle Usage
While working, you and your partner might have needed separate vehicles, but is this still the case? The expense soon adds up when you’re both paying for fuel, insurance, road tax, and other maintenance costs. While some couples in retirement cut down to one car, others choose to lose both cars and live in an area with all amenities nearby. Owning a vehicle comes with lots of hassle and unexpected expenses, so think about sharing a car between you and your partner to save money.
If you can downsize, this is one of the most effective ways to save money in retirement. Especially for those who still pay a mortgage, downsizing may allow you to remove that annoying monthly bill once and for all. Of course, any leftover money can bolster your retirement savings accounts. Not only do you save money initially, but downsizing is also a gift that keeps giving with reduced property tax, utility bills, and maintenance costs.
3. Assess Insurance Coverage
If you’re close to retirement, you probably now know all about the burden of healthcare. Many couples with a need for prescription drugs can pay upwards of $300,000 in retirement. When Medicare open enrolment comes around, don’t rush into any decisions. Instead, shop the market for the best deal.
With co-insurance expenses and gaps in coverage, many retirees supplement Medicare with Medigap or even a Medicare Advantage Plan. Each year, you have an opportunity to make changes to your enrolment options, so get the coverage that suits YOUR position most effectively. With the right insurance, you prevent over-spending and coverage that doesn’t consider your own health concerns.
4. Move State for Tax Purposes
Have you always dreamed of living in another state? Well, retirement doesn’t put an end to this dream. In fact, many retirees up sticks and move state at this stage of life because of the favorable tax rules elsewhere. Not all states tax investment income, Social Security benefits, and income from a pension plan. If you’re in a penalizing state, it might be time to rethink your location.
Save Money in Retirement Now
Ultimately, it’s a balance between saving money and seeking a high quality of life. As long as it doesn’t affect the latter too much, why not consider downsizing, losing a vehicle, moving states, or changing your insurance coverage?