When do you have enough money to retire? What kind of lifestyle will you be happy with? Will you have to learn to live well on less money? These are questions that millions of baby boomers are asking all around the world and the answers are as varied as there are people on the planet. It is an intensely personal question and most people are stressed out to some degree about the answers.
Depending on your age you may have time to prepare. If you are still in you 40’s or younger, then you have time to prepare and save for retirement. We have a lot of posts on this site that talk about how to go about saving for and planning for retirement. But, what if you are 55 or 60 and suddenly are forced to retire due to health or downsizing at your company? You may not have saved enough money and must make a lot of decisions about what you will do going forward and the lifestyle you will lead. You can still have a wonderful fulfilling retirement with a lot less money than what you planned, as long as you adjust your expectations.
Retirement – Live Well on Less – Some Ideas
We have compiled a few ideas about this stage based on a combination or personal experience as well as from reading a lot of information on the web and talking with friends and colleagues. Let us know if this rings true for you and or if you have comments or suggestions.
You will have to cope with your situation, what ever it is. Here are six things to think about as you adjust to retirement and learn to live well on less.
- Fine Tune your Budget
- Turn Time into Money
- Live Smaller
- Move to a lower Cost Area
- Work Part Time
- Become Debt Free
Retirement – Live Well on Less – More detail
Fine Tune your Budget
Regardless of how much money you have or receive as pension income, you must balance your spending with this income. This is probably a first step were you take stock of how much money you will take in. You must match your expenses to this income.
You might have to take fewer vacations or different vacations than you planned. Perhaps instead of going on a cruise, a trip by car might be in order. You may have to down size or give up some of the things you took for granted. This is the time to really take stock of what you can afford.
Turn Time into Money
When we are working, we do not have the time to do our own repairs around the home, we do not have time to look for sales and find the best deals. We end up spending a great deal more money as a result. Friends of ours are like this and think nothing of spending money like it will never end.
Once we are retired and living on a fixed income , we have time to do all of these things. A friend once was amazed that I can go on a trip for less than half of what he and his wife paid. It really was quite simple. I looked for a deal and I also was flexible when I traveled. As a result I saved more than 50% of the cost of the trip compared to my friend.
Look for sales on tools, clothes, food items, travel and whatever you are buying. You can save thousands of dollars by negotiating everything from hotels to furniture. Look for hotels that include free parking, WI-fi, breakfast and more when you travel.
Apply this simple concept to almost everything you do and you will be amazed at how much money you can save.
Many people live in a larger home, especially when they are raising a family. Once the family is gone, they really do not need all of that space and cost over head. It may be time to find another home that has a lower cost overhead.
A smaller home will cost less to heat, to cool and to decorate. Taxes should even be less as well. Consider all of these things when you look for something that will reduce your monthly costs.
There is one issue that you must take into account. It does cost dollars to move. These include real estate commissions, legal fees, moving costs and decorating costs. If your savings will not quickly make up for these extra costs you may want to just stay were you are! Compare and make an informed decision before you leap.
Move to a lower Cost Area
Some areas of a city, state or province are known to be expensive, while others are known to be less expensive to live in. Taxes may be less, and the general cost of homes and utilities all may be less. Moving to these areas can also save you money.
We even know one couple who have purchased a home in Mexico because the cost of living is so much cheaper. If you do plan to consider something as radical as moving out of the country there are many things to consider such as immigration issues and health coverage.
Work Part Time
Many retirees are finding that they can make a little play money by going back to work full-time or part-time. This is an excellent way to enjoy your retirement, renew your social life at work, meet new friends and make a little extra money.
some people do not care about the money. They just want somewhere to go every day and interact with people. Others have to work to make up for the income they have lost. Either way working can be good for you in many ways.
Volunteering is another approach to consider. Money is not a factor, since it is volunteer work you are doing. You are helping the community, you are meeting people and you are getting out several times a week. Many people are afraid of volunteering because it can quickly become a job without pay. The organization begins to depend on you and you feel guilty if you do not go in. Be firm and strike the right balance that works for you and your family.
Become Debt Free
Becoming debt free takes a lot of pressure off of you when you retire. This should be a primary objective for everyone. Just think that if you did not have that mortgage payment or that car loan, just how nice if would be to have that extra money to use for your personal needs.
Transition to one car, move to a smaller home, work part time , do whatever it takes to become debt free and enjoy the freedom of being debt free.