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Controlling your expenses in retirement can be frustrating. When you’ve entered your golden years with the workday routine behind you, you crave comfort and entertainment. You may pick up new hobbies that come with their own set of expenses. There’s vacations, time with family, buying groceries, unexpected home repairs. To help prevent shocks to your budget in your retirement, it’s important to consider cost-saving strategies so you can organize your money in your favor. Below are a few tips to facilitate better cash-flow in retirement.
- Reassess your bills.
As you make the transition to retirement, you might find that there are services and amenities you still pay for that you no longer need. For example, do you need cable if you have Netflix? Do you need a home phone line if you have a cell phone? Taking stock of your current budget and current needs helps you visualize areas where you can move money around. When your schedule is no longer so rigid, it’s nice to have extra money to put towards spontaneous activities.
2. Downsize
Downsizing doesn’t necessarily mean moving to a smaller house or an apartment. Although, this type of extreme downsizing does have its benefits: less maintenance, one-level houses present less risk for falling, and you can decrease the cost of your mortgage. Downsizing can also be as simple as selling clothes, furniture, and other things you are no longer using. Nowadays, it’s pretty simple to sell items online, which is much more efficient than having a traditional yard sale or selling to a consignment shop. According to USA Today, half of people around the world say they could live happily without most of the items they own, although this doesn’t make it easier to sort through the memories attached to belongings. Still, retirement is one of the best times for decluttering. Not only will you make life easier for friends and family who’ll have to sort through your stuff eventually, you’ll have extra money for making new memories.
- Control your credit.
Retirement is not the time for creating new debt. While it can be overwhelming to have so much free time to fill, this doesn’t mean that you should jet set around the world on the back of your credit cards. In fact, for the first time in 2012, households headed by those 50 or older had more credit card debt than those headed by people 50 or younger. Controlling your credit in retirement might mean cutting those cards up. But, credit cards can still work if you’re capable of keeping spending on credit to a minimum and instead of relying on credit for emergency situations, building up an emergency fund to counteract those unexpected “shocks” of retirement.
Living within your means in retirement isn’t the easiest part of your golden years, but doing so can help you enjoy your retirement without the anxiety of debt, while also helping you build up both emergency funds and spending resources for spontaneous fun. However, if you’re retiring already up to your ears in debt, or struggling with overwhelming expenses in retirement, there are other options to free you up and give you enough liquidity to actually budget. If you still maintain a life insurance policy you no longer need, did you know you can sell all or a portion of your life insurance policy for an amount greater than the cash surrender value? Life settlements (also known as viatical settlements) can provide the extra income you need. Our website has answers for you, to these questions and others, like, “What is a viatical settlement?” Visit Life Settlement Advisors and learn more.
Case Study:
Cliff and Kay are both in their early 80’s and have decided to downsize many aspects of their life i.e. – a smaller home. Cliff has a life insurance policy that he and Kay have decided they no longer need. Cliff discovered he could sell his policy for $89,000 and retaining $25,000 in death benefit at the same time.
