7 Tips to Save Money in Retirement

Everything these days is expensive. During our working years, our best efforts to save are constantly challenged by high prices. Children do not want to hear “too much” – they just want the latest and greatest gizmo heavily advertised on TV.  Once we retire, our budgets are even tighter and spending wisely that much more important. We want to “live” but we need to live within our retirement budget.

It is not easy, but there are some things we can do to hold onto as much of our retirement savings as possible. Here are a few tips that might fit the bill for you (no pun intended):

(1)  Cable TV evaluation – prices and packages differ by region but wherever you are, if you have cable beyond the “teaser” initial six month period, you are paying good money. Taking my situation as a case in point, we spend $100+ each month on our cable service which includes HBO, HD channels (when available), and your basic local and national broadcasts. We watch an occasional sitcom at night, rarely anything on HBO, and a few Sharks games when they are broadcast. $100 is a bit steep for that kind of use.

Doing some research, I learned that a basic antenna would give us first rate coverage of major local stations. Go to http://www.antennaweb.org and enter your zip code, then answer the question “are there any buildings, steeples, towers, or other structures taller than four stories within four blocks of your location, airports within two miles of your location, and/or many nearby trees over 30 feet tall? Then, specify whether the antenna height is single or multiple stories. Based upon this information, an antenna that fits your requirements will be recommended. In our case, the cost for the “right” antenna was $40, one time not each month. That does not cut quite as deeply into our retirement budget. You might even say we “retired” some of our debt… J

(2)  Do your own gardening – in retirement, taking care of the garden for many is therapeutic, something we do to show our pride in our home. But if we have a gardener, we take another hit to our retirement savings. In my case, we were paying $120 per month for two visits to mow the lawn plus clean up and remove leafs and debris. What if I took this over? Our lawn itself is small so I figured I could get by with a push mower. Looking on Craigslist.org, I found lots of power mowers available at good prices but I am not a mechanic and again, the lawn is small. So I went with a $139 push mower from Home Depot. Then I bought a gas powered leaf blower from Sears for $99 which includes a vacuum and leaf mulcher should I decide I need that (I have always wanted my own leaf blower so this was a win-win situation). Lastly I bought a gas powered weed eater from Home Depot for $70. I decided to go with gas instead of the electric as a matter of convenience – no cords involved. Plus, prices were comparable and as long as I was using gas for the blower, why not for the weed eater as well?

So for a total initial investment of $310, I was ready to rumble and within 2.5 months, I was running in the black. And the whole process takes me about 30 minutes start to finish.

(3)  Filtered instead of bottled water – a case of 34 bottles runs in the $5-6 range. You can filter your own water and save money plus keep another plastic bottle out of the dump. Your options here range from  filtered units that installs at your sink to charcoal filtered pitchers that you fill with tap water and five minutes later have filtered water. We use the Brita Slim filter which is about $13 on Amazon, again leaving us with more retirement dollars to spend where we want – on retirement!

(4)  Hang clothes out instead of using a dryer – a pretty basic idea but if you use less electricity, you have a smaller electricity bill. And the wonderful fresh smell of air dried clothes is an added benefit.

(5)  Minimize dinners out – this can be a big expense if seniors are not careful. Eating out is much simpler than planning and preparing an entire, balanced meal. Even if you are frugal and use senior citizen discounts and eat early bird dinners, it quickly adds up. When you do go out, there are things you can do to keep the bill tolerable. My wife and I are not big eaters so we tend to go with a hors d’oeuvre and share one main course. For wine, we generally try a glass of the house white and one of the red. We share and take notes for future reference. Dessert is not a biggie for us so we wait until we get home for a little ice cream. And we do without the after-dinner-coffee at $5 or more a cup. We enjoy going out and even more when the bill comes and does not choke us!

(6)  Cost effective plane travel – everyone wants to get to their ultimate destination ASAP. But if you can deal with one stop along the way, you will save money.  If the layover is more than 2 hours, we reconsider.

(7)  Federal tax credits for consumer energy efficiency – in “Financial check up list” the blog Money Funk explains “the tax credit for energy-efficient home improvements expires at the end of 2010. If you have heating units, hot water heaters, windows, or insulation that needs to be replaced, be sure to do it by the end of the year.” They point us to a website to get more information but we need to act quickly.

There are ways we can save a little here, pay a little less there, and positively impact our retirement savings bottom line. A lot is just paying attention and being aware of what things should cost – be an informed buyer and don’t pay more than you have to. In retirement, we do not want to do without. If we are frugal in our lifestyle and intelligent in our buying decisions, we will be able to afford and enjoy living the retired life that we have always wanted.

I have found some excellent blogs on frugal living and managing your spending including http://frugaldad.com , http://www.moneyfunk.net , and http://www.retirement-on-a-budget.com . Take a look at what they have to say as you strive to live an affordable retirement life.

Don’t forget to pick up a free copy of my Navigating the Retirement Jungle, available upon request by mailing to lovebeingretired@hotmail.com.

Free eBook – Navigating the Retirement Jungle

Email lovebeingretired@hotmail.com for your free copy

While writing LoveBeingRetired, I have discovered and shared what I believe is some very useful information to be help us better navigate the jungle that is retirement planning.

To summarize the journey so far, I have put together a short book covering the most important lessons learned.

Your free eBook will help you better understand:

* How to evaluate when you can afford to retire

* What is the real cost of building that nest egg beyond what you need

* Guidelines to living a frugal yet enjoyable retirement

* How to identify and pursue what is really important as you approach retirement

* Pointers on staying healthy so you can enjoy your retirement life

* How to identify and pursue your passion

To receive a free copy of “Navigating the Retirement Jungle”:

Send an email to lovebeingretired@hotmail.com.

In the subject line put Navigating the Retirement Jungle.

Let me know what you think – comments are encouraged.

It’s all about sharing what works to give us a little helpful guidance along the way and your input is greatly appreciated!

Enjoy the book and enjoy the journey.

Dave Bernard

lovebeingretired@hotmail.com

Salvage your Retirement Savings

Once we enter retirement, we will be paying our bills and living our lives in accordance with what we have saved during our working lives. Theoretically we have been funding our 401k plans from the early days (ideally our employer has offered some sort of matching) as well as IRAs and other investments, counting on steady growth and appreciation of the balances as has been the case historically. However, history has been re-writing itself this past decade and that somewhat predictable, steady growth has run into some major bumps in the road, impacting all of us to varying degrees. Near and dear to each of us, our nest eggs have been hit and that does not bode well for comfortable, worry-free retirement lifestyles that we are all hoping to experience.

Net worth fell 2.7% last quarter according to the Federal Reserve and now stands at $53.5 trillion. Compare this to the pre-recession $65.8 trillion and you can see the impact of recent events on our savings. And where the significance of this loss to a 30-year-old is noteworthy, for those of us who are retired, it is ever more dire. We do not have the years to try again to rebuild our nest egg. In AARP’s “Running out of money worse than death” 61% of people between 44 and 75 say they fear depleting their assets more than death. More than half of those polled said their net worth significantly decreased during this most recent economic downturn.

I find hope in the darkest of days, and focus in the brightest. I do not judge the universe. ~ Tenzin Gyatso, 14th Dalai Lama

Unfortunately, it is what it is. We cannot make it better by fretting and worrying and although there is no magic silver bullet that will put things back the way they were, there are some things that we can do in our efforts to re-coup our loses.

I WANT MY MONEY

(1)  Revisit your budget and living expenses and see if there is anywhere to cut back – according to the AARP article quoted above, 47% of those polled found ways to reduce their living expenses by cutting back on entertaining and dining out. If you have not done so yet, you may want to consider downsizing your house. Drastic times call for drastic measures. And don’t be shy when it comes to taking advantage of senior citizen discounts and coupons. Take another look at Senior Citizen discounts – get your money worth for some ideas.

(2)  Meet with your financial adviser – with all of the changes and turmoil, it is important to objectively and critically review your investments and revisit how you are diversified. Use the experts when you are talking about something as important as your future financial security. They do not work for free but they know their financial stuff. In his post “When financial planners are worth the money” David Ning helps to justify the cost of a professional adviser for such important areas as protecting your assets and to provide extra assistance in your investment choices. I think there is real value on scheduling regular, ongoing meetings with your financial person to review the current state of things, make adjustments where appropriate, and make sure that the amounts you are taking from your savings is sustainable over the long-term.

(3)  Avoid risky investments – if it sounds too good to be true, it probably is. Our greatest limitation when it comes to retirement savings and building our nest egg is the amount of time we have to complete the task. The clock is ticking and we cannot count on our investments growing for the next 40 years. But don’t allow yourself to be tempted –  stay away from risky investments and avoid what you do not understand. Some good pointers can be found in How to avoid risky retirement investments by Ryan Guina, including if you don’t understand it, don’t invest in it.

(4)  Going back to work (at least for a while) – I am a big believer in working hard and saving wisely so you can retire and enjoy yourself. But with recent times, the reality is that we may have to figure out a way to earn some more money. If we can do this by pursuing something that we love, our passion, it may actually be a good thing. Otherwise, we unfortunately may have to do what we have to do to get by.

It has been a rough ride for most and we have definitely taken our bruises. The future is unknown and all we can do is our best to prepare ourselves for whatever may come. But I am optimistic. We are learning from our mistakes and hopefully not overly anxious to repeat them. Caution and frugality are replacing risk and spending which is a good thing. And with our health and positive outlook on life (the only way to go…), who knows what tomorrow may bring…

Don’t forget to pick up a free copy of my Navigating the Retirement Jungle, available upon request by mailing to lovebeingretired@hotmail.com.