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Living Well on a Fixed Income: 5 Tips for Financially Savvy Seniors

Photo by Irina on Unsplash

If you’re in good health, your retirement could last three decades or more. Will your money last as long?

Careful budgeting is the key to long-term financial security when you’re on a fixed income. Unfortunately, many seniors get caught up in the carefree retirement lifestyle and don’t pay enough attention to their bank accounts. This lands them in trouble when retirement savings run out and they’re left to live on Social Security alone.

Luckily, you don’t have to give up your retirement goals in order to protect your wallet. By saving money in the right places, you can have more to spend on all of the things that make retirement great.

5 Ways to Save Money in Retirement

1) Check your health insurance coverage

Between Medicare Part B, Part D, and supplemental plans, health insurance can take a big bite out of your income. For seniors with chronic health issues, paying for extra coverage is usually a smart choice. However, if you rarely see the doctor outside of preventive care visits, you may be able to save money with a plan that offers low premiums but higher copayments. That could be original Medicare sans Medigap or a Medicare Advantage plan that charges minimal premiums beyond Part B.

2) And auto insurance, too

Car insurance is a small expense compared to health coverage, but it’s still worth the effort to shop around. After all, saving even a few hundred dollars per year means more money to do what you want.

A policy that meets your state’s minimum coverage requirements is the most affordable, but if you prefer the peace of mind of full coverage, look for ways to save. Some insurers offer discounts if you bundle policies, install an anti-theft device, drive fewer than 12,000 miles a year, or have an immaculate driving record. If your current car insurance company doesn’t offer discounts, get quotes from a few other providers to see if you could save by switching.

3) Get rid of your second car

Speaking of car insurance, you’ll pay a lot more for coverage if you’re insuring more than one vehicle. It’s not just insurance either. Owning a car also means registration, taxes, maintenance, and other associated costs. Since you’re no longer commuting to work, sell your extra vehicles. Thanks to public transportation and ride-sharing services, being a one-car household isn’t an inconvenience anymore.

4) Downsize your home

Whether you’re still making mortgage payments or totally paid off, your home costs money. Property taxes, insurance, maintenance and repairs, utilities, and services like housekeeping and landscaping can consume a large portion of a senior’s income. In fact, housing is the single biggest expense for retirees, accounting for one-third of most senior household budgets.

A smaller, cheaper home can slash all of those costs and be more friendly to senior living. The work required to maintain a large estate becomes daunting as you grow older, but a compact home is convenient and low-maintenance for life.

5) Or move to an affordable destination

If you’ve done the math and the numbers simply don’t add up, it’s time for more drastic measures. Sure, you could stay put and pinch pennies in order to get by, but you’ll enjoy a higher quality of life on a smaller budget if you move to an affordable destination.

Seniors have tons of options for affordable retirement destinations, from budget-friendly U.S. cities to exotic expat hubs in Panama and Costa Rica. Instead of searching for a retirement destination and then trying to make your budget work, decide what you can afford before finding a location that fits it. That way, you don’t risk falling in love with a retirement destination outside your budget.

With big money-saving changes like these, you won’t spend your retirement clipping coupons or skipping doctor’s visits to save a few dollars. Instead, you can enjoy your retirement knowing that you’re saving money in the big places so you don’t have to worry about the little ones.

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