The right financial plan is an essential component for ensuring a comfortable and secure retirement. As you shift from a working income to a fixed income, finding ways to help minimize expenses can free up the funds needed to ensure a better quality of life during retirement. Here are just a few of the many options that may allow you to stretch your financial resources to cover your retirement expenses.
Moving to a Smaller Home
It is not uncommon for mortgage payments or rent to constitute the bulk of monthly expenses. Hopefully, by the time you retire, you will have paid off the bulk of your mortgage. While making the transition to a smaller home, an apartment, town-home or condo may seem like an extreme measure, choosing to sell your house in order to move someplace more affordable is often the single most effective way to stretch your retirement budget. Look for investors who buy houses to save commissions and sell quickly. The right house doesn’t have to be huge in order to provide you with comfortable surroundings.
Selling Extra Vehicles
Maintaining a vehicle can often be a more expensive proposition than you might realize. Even if you rarely drive it you still have to maintain it and pay for insurance, although some companies like MetroMile, Snapshot, and In-Drive offer insurance plans based on actual miles driven. They track your miles by a device that you plug into your car and bill you accordingly. But eliminating the additional vehicles altogether can save you even more.
Selecting the Right City
The cost of living associated with a particular city or even a region can vary tremendously. Finding a more frugal location may hold the key to ensuring a more comfortable retirement. Electing to move someplace more affordable can be of tremendous importance for those who are struggling to live within their means. Using a Cost of Living Calculator allows you to compare costs for two cities and decide which one is more economical and since you aren’t locked into a location because of your work you can choose to relocate to a lower-cost location. For instance, if you worked in Annapolis, MD and had a budget of $100,000/year you could live the same lifestyle in Leesburg, FL for only $57,724. So in addition to enjoying warm winters, your budget would go almost twice as far.
Minimizing Seasonal Expenses
Due to their intermittent nature, seasonal expenses can often be difficult to track and manage. Issues like seasonal fluctuations in your utility costs or expenses associated with holidays, trips and vacations can often play a major role in terms of your end-of-year budget. Taking steps to keep seasonal costs from getting out of hand could end up saving you more than you might expect. If you’ve chosen to live in a moderate climate without extremely cold winters or extremely hot summers you can minimize these major expenses of heating or cooling. These expenses will be included under “Utilities” in the Cost of Living Calculator.
Planning a Secure Future
Effective financial planning is essential for providing the funds and resources needed to make the most out of retirement. While starting your nest egg early on makes a huge difference, it’s never too late to start planning a more secure retirement. Assessing your situation, fine-tuning your budget or speaking with a financial planner can all provide you with plenty of opportunities to curb your spending and streamline your budget.
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