One of the hardest things for many retirees to get used to is not collecting a regular paycheck. For that matter, raises, bonuses, promotions and other perks are also gone. This can be disconcerting to say the least. Add to that the fact that most financial experts are recommending to have at least $1 million in retirement savings (a number that’s quite unrealistic for many) and it’s no wonder that many people approaching retirement are stressed out because of their financial situation. They don’t think they have enough money and, in comparison to what the experts believe, most are correct.
While retirement may look a bit scary to you (and believe us you’re not alone), the good news is that there are going to be quite a few things that you’ll start saving money on after you retire. In fact, we’re not so sure that the experts are right on this one and it’s possible that, because of the savings that were going to tell you about, you may be able to retire comfortably on much less income. Let’s take a look.
Depending on the type of work that you do, it’s possible that you’ll be saving hundreds if not thousands of dollars a year on clothing. There won’t be a need for those three-piece suits, a closet full of shoes or a new outfit every week. White color and blue-collar workers alike can save quite a bit of money just from this one factor as the uniforms needed for many different occupations can be quite expensive.
Most people will definitely be saving on their commuting costs, including the cost to drive your car to work, take a train, use a bus or even take a taxi. For example, if you drive 40 miles to and from work every day you’ll save almost 20,000 miles a year. At 56.5 cents a mile, that’s a savings of almost $10,000.
Speaking of commuting costs, you may even be able to get rid of one of your automobiles. Most households today have at least two cars but, if you and your spouse will be spending much more time together, there might not be a need to have more than one. The savings here can be substantial when you factor in the cost of the car itself, insurance, gasoline and maintenance.
If you live in one of the more expensive states like New Jersey or California you always have the option to move from that state to another where the cost of living is much more economical. Now we won’t try and say that this is an easy option but, depending on your financial situation and also where your family resides, moving to a state with a lower cost of living may be an excellent option. It actually kills two birds with one stone as, if you’re living in a big house but you don’t have need for it, you can move to a new state and a smaller house.
While some financial advisors will tout this next factor, the reality is that it depends on the family and the type of household that you have. In any case, many retirees are able to save thousands of dollars simply for the fact that they don’t have any children living at home. This cuts down on several expenses including groceries and energy for electricity and hot water, or even the additional burden of finding an affordable home security system.
The reality today however is that many adult children are moving back in with their parents and, in some cases, this is actually beneficial for both. The adult child gets an economical place to live and possibly built in babysitters while the parents have the security of a younger person around in case of any type of emergency.
If you’re lucky enough to have saved sufficient money to do some traveling, the even better news is that, since you don’t have a time clock stopping you, you can travel midweek, out of season and any other time when rates for airline tickets, hotel rooms and rental cars are lower. Indeed, the freedom to travel during off-peak hours, days and seasons can literally save you thousands of dollars.
Although the savings here are minimal, everything counts in retirement. With that in mind, don’t be shy about using your age to get senior discounts wherever and whenever you can. Practically every retail store, every restaurant and every tourist attraction in the United States has some type of senior discount and, while it may mean visiting during certain hours and following specific rules, the savings are real. In some cases there are events that are completely free for seniors including lectures, exercise classes and so forth.
Finally, there’s the fact that youdon’t have to pay Social Security anymore since you’re actually on the receivingend now. Not only that but the 10 to 20% that you were putting aside for retirement is no longer necessary. All in all, the savings potential due to all of these changes when you retire can easily equal thousands of dollars a year.
We hope this blog gave you some helpful and valuable advice and also called your fears a little bit. Retirement can be a little scary but, if you plan ahead and prepare, you should do just fine. Remember to come back and visit us often for more financial information on many different topics. See you then.
Speak Your Mind