AN EXCERPT FROM MY LATEST BOOK, CAN I RETIRE
LIVING BETTER FOR LESS
Since you’re a few years off from retiring you should begin enhancing your savings by reducing your expenses, this way you can also lower the amount required after you retire. The less you need for your retirement income, the more you can save for the unexpected. Knowing by how much you can lower your living expenses all depends on your needs but you can reduce your expenses three different ways:
- Find a cheaper alternative to getting what you already need. This refers back to the section on comparison-shopping, as it’s not just for food or clothing, it relates to car insurance, travel, vehicles, and gasoline as well. If you can get what you require for a lower price than your retirement income will be lower than what has been estimated thus far.
- Eliminate debts and unnecessary expenses. As already discussed, it is important to reduce your debts as far down as they can go and cut costs on expenses that are not needed. What counts as an unnecessary expense all depends on the person. Most people like to drink beer or wine but that doesn’t mean you have to drink the most expensive bottle out there. Find a cheaper made beverage that still
tastes just as good and save what’s left over for other, more important things.
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Move to where the cost of living is cheaper. Moving from a big city is an expense in and of itself, especially if you rely on public transportation. However, it can end up costing you more to live there than in the boonies, especially since the cost of homes in smaller places is nowhere near as high as they are in the city. This is because there are more people per square inch living in cities than there are living in towns or the boons. There’s a reason people prefer living in Brooklyn and commuting to New York City each day, and it’s not because they love the hassle of public transit.
Living on a modest income as a retiree is doable. The average amount recorded as of late that those retired are living off of is about $25,000 a year, which is 50% less than the normal family living on an estimated $47,000 per year. The problem is that those of heading into the luxury of retirement are living in a much different economy that your grandparents or even your own parents. The recession has made things more challenging for all, thus why even those who had planned for contingencies had to find a way to increase their retirement income and some had to go back to working for a while before things settled back down.
Although not intending to frighten anyone when I say this, the fact of the matter is that the economy is still not yet fully recovered from the recession and another one is a possibility in the future. That is why it is important to try and live off of as little as you actually need right now and plan for the possibility of needing more after you retire than originally thought of. You’re retirement budget should be realistic and factor in any possible contingencies from needing long-term medical care, to being pulled back into an economic slump.
