How to Downsize for Retirement

For many people, living on retirement funds is very different from living on a working salary. Depending on factors like how much you saved, how the stock market is performing, if your job provided a pension, and what you receive from Social Security, you may be living on a fraction of your previous income.

Thankfully, your expenses are likely different as well. If you know where to cut back, you can broaden your budget, live more comfortably, and continue to prepare for the future.

Want to downsize for retirement? Here’s where to start.

Housing

Housing is one of the greatest expenses in anyone’s budget. It could potentially range anywhere from one-third of your paycheck to half of your paycheck. Whether you own your home or rent, downsizing is a viable option to save money.

New Location

Most people live near where they work, but if you don’t have many pressing commitments with set locations, you’re free to seek out more cost-effective areas. Maybe it’s a little further out of the city, which you hadn’t previously considered due to commuting traffic.

New Size

For retirees who once raised a family, downsizing from a multi-bedroom house or apartment to a single bedroom situation could be ideal. While your current home may hold precious memories for you and your family, making the move could free up a lot of room in your budget.

Vehicles

If you have a partner in retirement, downsizing from two cars to one can save a great deal long-term – not only on insurance payments, but also future repairs.

Selling one car can also provide a one-time boost to your savings, which can be used on a vacation, family, or as an added buffer room in your emergency savings.

It can be hard to give up a car, as it helps provide movement and a sense of freedom. Nonetheless, it’s fairly easy to adjust to sharing a car. It only demands a little extra planning for activities and, should scheduling conflicts arise, the ability to negotiate with your partner. Plus, there’s always ride sharing in case you need to be in different places at once.

Daily Expenses

Retirees generally have more time available to them. Unless you’re volunteering, working part-time, or have a very booked dance card, you can use this extra time as a way of saving money.

Most people with full-time jobs feel drained at the end of their day and opt for fast food, pre-made meals, or other ways of saving their time and energy. Retirees can downsize these expenses by using their added time more constructively.

For example, you can opt for home cooked meals instead of take-out. Rather than buying coffee in the morning, you can make it at home. If something in the home breaks, you can spend time repairing it yourself, instead of hiring a professional to save energy.

Early Bird Discounts

Without a job monopolizing and dictating a large portion of your day, you have more freedom in performing errands and activities.

Look for places that provide early bird specials, which working people can’t take advantage of due to their hours. Also ask for senior discounts no matter what time of day it is. While these savings may seem minor, they quickly add up over time.

Couponing

For those with the time and energy to spend, couponing can ease your budget. Take the time to sign up for free coupon ads, scour the stores for coupon inserts, and clip and categorize them for later use. With enough strategizing, you can end up saving more money on groceries than you spend.

Conclusion

Downsizing may seem stressful, but it can save you money in the long-term. This not only helps ensure your retirement can be enjoyed more comfortably, but that you have the funds to spend on travel, family, and all those splurges you dreamed about during your working years.