Reducing Your Expenses Before You Retire
Expenses Before You Retire
They’ve been a long time coming, but you can finally see your golden years coming up on the horizon. You’ll finally have time to do what you want to do as opposed to what you have to do.
However, you’re going to need to make sure your money is right if you want to have the wherewithal to realize your dreams. Even if you’ve been squirrelling away your assets very carefully and you have more than enough cash in place, you’ll still derive a benefit from reducing your expenses before you retire.
Here are some things to consider.
Downsize Your Home/Eliminate Your Mortgage
That huge house you needed when you were raising your family is now consuming far more of your resources than is necessary. Your utility bills are higher than they should be. Your potential repair costs are higher than they should be and you might well be paying more property tax than you should be.
Further, now that you no longer need to live within commute distance of your job, you could move to a less expensive area altogether. A town where food and fuel cost less, taxes are lower and homes are more affordable could extend the viability of your nest egg by many years. Ideally, you’ll sell your existing home, roll the proceeds into a smaller one and live mortgage-free.
Rid Yourself of Car Payments
If you’re five years out, now is the time to buy the car that will carry you through your retirement years. Choose a model noted for its reliability and low maintenance costs as well as fuel efficiency. Purchase this car with a 60-month loan so you can pay it off just before you stop working for good.
Yes, we realize we just advised you to take on a new debt above and now we’re saying eliminate debt. The debt to which we’re referring here is high-interest credit-card debt and the like. If you’ve grown accustomed to carrying a balance from month to month on your credit cards, now is the time to break that habit.
If you’re dealing with more debt than you can viably eliminate within a five-year time horizon, consult a debt services professional to help you come up with the best strategy for accomplishing this. Look for information like these Freedom Debt Relief reviews to help you find the solution best suited to your situation.
Reassess Your Insurance Coverages
Getting a less expensive car will lower the cost of your auto insurance. In fact, you might even get by with liability coverage only, which costs much less. Moving to a quieter town will potentially reduce your homeowner’s insurance premiums as well as the price of your car insurance.
However, you should acquire long-term care insurance if you have yet to do so. Research shows most Americans over the age of 65 will need some form of extended medical care during the remainder of their lifetimes. That expense can completely consume your nest egg if you have no buffer between it and your savings.
Just Say No
Younger relatives going through life’s changes are likely to come to you seeking financial assistance. While you can generally provide this comfortably while still earning, retirement is not the time to be the family lender. It’s going to be painful, but you may need to start denying those requests to preserve enough ready cash to carry you through the rest of your years.
Reducing your expenses before you retire is critical to ensuring your savings are sufficient to tide you over. After all, you might just live a lot longer than you’re expecting.