Retirement is a phase that comes with so much excitement. People look forward to a time when they are relaxed and free from the hustle and bustle of active work life. However, for many, fear sets in. The fear of adjusting to a lower standard of living and “what if the money I saved up for retirement doesn’t last?” A good approach is to start making adjustments while working, especially ones centered on curbing expenses. To help you get started, here are five smart ways to downsize your costs before retirement:
- Move to a less expensive home
A good way to start your downsizing is by spending less on a home. This could mean moving from the city to a less urban environment to save on mortgage and property taxes. It could also involve selling a big home and moving to a smaller house that costs less to own and maintain. And if you choose to keep your big house, consider renting out a room or two, then use the rent to reduce your monthly out-of-pocket expenses.
- Reduce grocery bills and maximize rewards
Maximize your credit card rewards to make some savings on groceries. Using credit cards that offer cash-back rewards to shop for groceries will help you save some coins. Most supermarkets run weekly sales, so buy nonperishable items in bulk. Research ahead of time about prices and deals so you can get even better deals. It may also be smart to purchase all items at the same store. Make a grocery list and stick to it to help reduce unexpected costs.
- Work on a mortgage repayment plan
As a retiree, your income is limited, so deploying a payment plan before retirement is a good way to offset your mortgage. If you still have a mortgage to pay off in retirement, seek low-interest loans. There are some payment options very suitable for retirees, which means you can streamline your total payments and even shorten the term.
- Reduce your internet costs
If you’re someone who likes to spend time online, it means your internet costs are about to increase. A common mistake people make with internet subscriptions is they try to save costs but end up being penny wise. It’s cheaper to buy an unlimited plan once monthly than to buy a limited plan twice in one month because you ran out of data.
- Review your car needs and insurance plan
If you need more than one car in your home before retirement, you may not anymore now that you’re about to retire. Consider downsizing to decrease your car expenses and insurance costs. As a retiree, your daily commute also reduces significantly, so you should consider reviewing your current car insurance. Now that you are no longer exposed to certain risks, would it be smart to get a better plan that suits your lifestyle? That’s a conversation you need to have with an insurance professional.
You have worked hard your entire life; now that you are retired, let some of your expenses retire as well. Most importantly, be smarter and more intentional about the things you pay for. The list above doesn’t contain all the ways you can reduce your expenses because what we spend on varies from person to person. However, it shows you that as a retiree, you can do more with little and improve the quality of your life by reducing your expenses.