NEW YORK (MainStreet) -- Many soon-to-be retirees assume their spending behaviors will change as soon as their lifestyle does, but the truth is it can be difficult to break old habits.
“You do have to make a conscious effort” to ensure you have an adequate cash reserve on hand for happy golden years, says Katie Coleman, a financial adviser with Ameriprise Financial.
The good news is that between leveraging some awesome senior discounts and making a few lifestyle adjustments, new retirees can easily drive down monthly expenses. Here are 10 items that can be cut easily from any post-retirement budget:
The Internal Revenue Service offers taxpayers 60 and older free assistance through its Tax Counseling for the Elderly program. Program volunteers actually specialize in questions about pensions and retirement issues unique to seniors. Folks who retiree early may alternately be able to get free tax prep through the agency’s Volunteer Income Tax Assistance program.
“The VITA program is for people earning less than $50,000 per year,” says Donna Freedman, a Savings.com DealPro who also runs the blog Surviving and Thriving. You can find more information about both programs on the IRS website. You can also find additional free tax tools here.
If you’re taking on a part-time job to occupy your time, you may want to forego the disability insurance.
“Disability is designed to replace lost income,” says Jeff Yeager, savings expert and author of The Cheapskate Next Door, meaning it's no longer necessary if you’re already getting Social Security or have a nice nest egg in the bank. He also suggests those without children considering paring down their life insurance policies.
“In most cases, it can be discontinued or decreased,” he says.
Dining out and prepared foods
Don’t use extra time on your hands to drive out to your favorite restaurants. Instead, concentrate your efforts on cooking quality meals on your own. Many local rec centers may offer free or discounted cooking lessons to seniors that can help you find culinary inspiration.
“There’s a real value to having extra time,” Yeager says. “You want to stop paying people to do things you can do yourself.”
To keep grocery costs low, avoid prepped foods such as pre-cut veggie platters or bakery items, which often feature huge price markups.
“You will pay more for convenience,” says Andrea Woroch, a consumer savings expert at Kinoli, a network of personal finance websites. “Instead, buy the ingredients whole … and prepare [and] cook everything yourself.”
A second car
“Retirement is the time in your life to downsize,” Yeager says. As such, multiple-car houses may want to consider selling their second car. The transaction can lower monthly insurance premiums and reduce fuel expenses, since you won’t be filling up two tanks of gas.
“There are many good transportation systems in most cities,” Yeager says, and that can help couples run errands when their spouse is using the family wheels. More often than not, these buses or trains do provide discounts to seniors.
Another way to downsize is to forgo designer duds, especially since the few practical applications their labels may have had are no longer on the table.
“Retirees are less interested in status symbols,” Yeager says. “They don’t have to impress people in the workplace to land job opportunities.”
Forget brand name cereals. Instead, look for the generic or store brand versions of your old favorites on the bottom shelf of the cereal aisle. Sometimes these versions are even made by the same manufacturers as their pricey counterparts.
“People who buy band-name cereals spend on average 40% more than those who buy generic,” Woroch says. “Compare ingredients side by side to verify that the generic version of your favorite brand-name cereal will taste the same and give it a try.”
Low-income retirees with bad eyesight can score free examinations from members of the American Optometric Association through Vision USA, a program run by the nonprofit Optometry Care.
“Services may be limited in some areas and you must first go through an application process,” Freedman says. She also suggests looking for low-priced frames and lenses on websites such as Zenni Optical, Coastal, 39DollarGlasses, EyeBuyDirect and Select Specs. Prices for basic subscriptions can go as low as $6.95, and the sites also often offer free shipping.
The idea here isn’t to forgo fun entirely. Instead you should look for ways to score tickets to your favorite events for free. Yeager suggests volunteering as an usher at the local movie theater or baseball stadium so you can take in events without having to actually money for them. (Again, your time serves as your currency.)
You can also research what free attractions may be available to you. Bank of America and Merrill Lynch credit card or debit cardholders, for example, can get free admission to 150 museums in 31 states on the first Saturday of every month, Freedman says.
“It’s a real mixed bag,” Freedman says; the venues include the Metropolitan Museum of Art in New York, The Museum of Fine Arts in Boston, the NASCAR Hall of Fame in Charlotte, N.C., and the National World War I Museum in Kansas City, Mo.
Retirees looking to expand their educational horizons don’t need to pay for that pastime either. According to Freedman, many major universities offer free courses through various digital platforms and partnerships. The Massachusetts Institute of Technology, for instance, offers access to educational materials from hundreds of international institutions on OpenCourseWare, while Princeton, Stanford and a few other top universities offer a some free classes through Coursera.
“Other classes, webinars and tutorials abound,” Freedman says. She suggests those interested in learning about tech during retirement type “How do I do [whatever computer skill you want to learn]?” into their favorite search engine. You can also find nine alternate free online courses here.
Bad habits such as cigarette smoking, overeating or ardent alcohol consumption certainly aren’t free, so it may be time to eliminate them from your lifestyle and budget.
The idea, Coleman says, is to cut down on unnecessary spending.
“Look for ways to reduce expenses prior to retirement,” she says, suggesting retirees also minimize small indulgences such as daily stops at the local coffee shop or frequent trips to the dry cleaners to not jeopardize nest eggs.
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