With the economy struggling and no guarantees for the future, many retirees are thinking about downsizing so that their savings lasts longer and they don’t face financial crisis in the future.
And this isn’t such a bad idea.
Downsizing can help ensure that your retirement savings don’t diminish too quickly, removing some of the financial burden and stress when you do retire.
The most significant methods of trimming your budget so that you can retire with fewer financial burdens include,
- Housing – This is one area where you can significantly downsize and save money, but it is also one of the most difficult sacrifices to make. Many people do not want to get rid of their family home due to the emotional ties to the house, but if you can overcome this, you will be financially better off. When you sell your larger home and purchase a smaller dwelling, not only will you likely have extra proceeds from the sell of your house, but also your payments will be much lower, as well the maintenance expense and taxes.
- Move to a Retirement Community – Living in a retirement community is often less expensive that living in your own home. There is less upkeep and far more opportunities to socialize with people your own age.
- Sell Your Second Car – Most retired couples simply don’t use two cars; in many cases the second car sits in the garage most of the time. If you sell that second car you can save money on taxes, as well as the cost of insuring that car.
- Relocate – If you live in an area where the cost of living is high or there are high taxes, you might want to consider relocating to a different region of the country. Some states offer far lower taxes than others, plus if you are accustomed to a high cost of living, moving to an area where it does not cost as much to live will be like giving yourself a raise.
- Cut Unnecessary Expense – Look at your budget and decide where you can cut unnecessary expense. If you have both a landline and a cell phone you might be able to dump the landline if you have more minutes on your mobile phone plan that what you use each month. If you don’t watch much TV, you can get rid of your cable or satellite TV and save hundreds of dollars every year. If you take the time to examine your budget and cut out what you don’t really need or use, you will be surprised at how much money you can save.
Don’t let a bad economy frighten you out of your long awaited retirement, simply find ways that you can downsize and put that extra money in your pocket.