Retirement is that special moment in your life when all those years of hard work finally pay off. It’s when you get to wake up when you want to- not when you have to report in for work, when you have to wake the kids up for school… Retirement is when you get to trade in your responsibilities and obligations for pure, unfettered freedom. Retirement is all about doing what you love, visiting new places and experiencing new things.
It is unfortunate that- with all that free time- we are limited by the savings we have. Hopefully you’ve invested in your future and are properly prepared to enjoy the rest of your life… but even when you’ve prepared well, it can be helpful to save wherever possible. One of the best places to help save a little is by cutting your monthly expenses: especially housing costs. Why spend money on a home that doesn’t really work for your lifestyle anymore? Thankfully, there are many ways to help you cut housing costs and divert that money into ways you can enhance your life and enjoy it to the fullest! Here are six!
How to cut housing costs in retirement:
- Right-sizing: While the buzzword for many years was “downsizing”, it’s better to think of the process as rightsizing your living situation. Start by determining what you really need from a home as you entire your retirement. While a big home with a large, spacious yard may have been a necessity while you raised children, those same features may just be a source of unnecessary stress now. A smaller home and property will generally mean lower maintenance costs, less cleaning, and lower taxes: all big pluses for someone living within their retirement income. Rightsizing could also mean moving- perhaps you no longer need to live close to where you once worked, meaning you can look for property further from a city center or perhaps nearer to family.
- Is your Mortgage right for you?– If you do plan on staying in your current home, it’s important to streamline and minimize your costs. Refinancing your mortgage could help save you money every month. Also consider reverse mortgages. Federally insured reverse mortgages can provide income to supplement your retirement savings. These are not solutions for everyone, but for some it truly helps.
- Sell or Rent out your home- Maybe you no longer need a home at all. Selling your home and pocketing the proceeds can give you additional freedom to pursue your dreams. If you plan on traveling, it may be more cost effective to rent in your vacation destinations rather than maintaining a home and mortgage that sits empty most of the time. Another option could be renting out your home and living in a more affordable area. When raising children, many families choose to live in a higher rated school district to provide their children with the best possible opportunities. Once the kids have moved out and schools are no longer a factor—renting a home may provide more of an income to offset additional living costs.
- Home Sharing: Whether you’re sixty-five or twenty-five, living expenses are always going to be more affordable when they’re divided across more than one income. Housemates are a great way to keep costs low for an individual. The big advantage to finding a retired housemate is they’re more mature and responsible than their younger counterparts- no need to worry about a big house party while you’re out of town! Home sharing is an excellent choice if you plan on doing a lot of traveling, where you’ll be away from home for long stretches of time: your housemate can maintain the home while you’re gone. Home sharing also applies to moving in with extended family, much for the same reasons- spreading expenses across multiple incomes, having help around the house when you’re away, etc.
- Retirement Communities: A difficult part of getting old is admitting that you’re getting old. If you still want a place of your own, but aren’t sure you need an entire home and property of your own, consider a retirement community. These 55+ communities look to address the needs of aging individuals and provide them with affordable accommodations that require low-maintenance while also offering great conveniences and even luxuries. There are many types of retirement communities in countless locations: from here to the Florida beaches! Retirement communities will look after your property when you’re away on vacation, and being nearby to so many other people like you may be a great social opportunity to make new friends- all while cutting down on housing costs, compared to owning your own home.
- Retirement in Phases- “Retirement” isn’t just a single day- its years of your life. As you get older, your wants and needs will likely change. Assisted living can be one way to help address those changes in a way that can make your life easier. Multi-stage communities can help you save thousands as you plan responsibly for the future. Even if you’re able to support yourself for many years to come, it’s good to plan for possible situations that could arise in the future.
Retirement is the beginning of an exciting new chapter of your life! Those responsibilities that ruled your life for many years have dwindled and now there is lots and lots of time for you. Whether you’re already retired or in the final planning stages, consider the cost of housing and how it may impact your future. Saving money on expenses is one of the smartest ways to extend the longevity of your savings account for many happy years to come.