Yahoo Finance Cutting Expenses in Retirement: 9 Things To Downsize (That Aren’t Your Home)
There’s no doubt that you’ll need a well-padded nest egg to help you survive retirement.
Learn More: Retirement Planning: How Much the Average Person Under 70 Spends Monthly
Check Out: The Surprising Way You Can Get Guaranteed Retirement Income for Life
According to a recent study by GOBankingRates, Americans ages 65 and over need between $679,000 and just over $2 million to retire, depending on which state they live in, assuming a drawdown of 4% per year for living expenses.
One way to help you stretch your retirement funds is to cut expenses. Here are nine things to downsize that don’t include your home.
Cable TV and Streaming Services
Retirees should consider downsizing their cable TV and streaming services in retirement, said Jared Virgadamo, a chartered retirement planning counselor (CRPC), certified fund specialist (CFS) and investment associate with Manske Wealth.
“The cost savings can be significant for some,” he said.
According to a recent survey conducted by Equitable, the average person spends an average of $75 a month just on in-home streaming and entertainment. That quickly builds up to $900 over the course of a year.
These costs only increase. As Virgadamo explained, “… the monthly cost of these services increases when someone starts adding all the additional channels to a cable package or keeps buying subscriptions to new streaming services but never cancels the old ones.”
Be Aware: 4 Things Boomers Should Never Sell in Retirement
Read Next: 4 Reasons Retired Women Need More Money Than Men — And What To Do About it
Wealthy people know the best money secrets. Learn how to copy them.
Extra Cars
“Retirees may not need more than one vehicle per household, so consider selling extra cars and saving [on] auto loan payments, insurance and maintenance expenses,” said Laura Adams, award-winning personal finance author and money expert with Finder.
Selling an extra car can save you thousands per year. For example, according to AAA, if you drive a 2020 Toyota Avalon, 4-door sedan 10,000 miles per year, you would pay the following costs, which add up to $5,511 per year:
Fuel: $1,467
Maintenance and Repairs: $1,981
Insurance: $1,525
Fees & Taxes: $538
If you can’t do without the extra car, you can downsize your vehicle to a make and model that’s less expensive to maintain and fuel up.
Try This: 8 Things Boomers Should Sell Right Before Retiring
Recreational Vehicles
“Likewise, if you have a motorcycle, boat or RV you’re not using, liquidating them can cut multiple costs,” Adams said.
You can avoid hundreds (or thousands) of dollars in expenses each year for fuel, insurance, maintenance and repairs when you opt to get rid of your recreational vehicles.
Storage Units
“Retirees with personal belongings in storage should sort through them and donate or throw away items they genuinely won’t need, reducing or eliminating those monthly fees,” Adams suggested.
According to data compiled by Move.org, storage units cost between $70-$300 per month, with the average cost hovering around $180 monthly. That’s $2,160 annually you could be saving.
Phone or Internet Services
“You might have phone or internet packages you could downgrade if you no longer need as much data or high-speed services,” Adams said.
According to Reviews.org, the average monthly cost for home internet is $80 and the average monthly cost for a mobile phone plan for one person is $66, which adds up to $140 per month.
However, you can find basic internet plans for around $20 per month. Additionally, if you opt for an MVNO provider for your mobile phone service, like Visible or Mint, the average monthly cost is $39 a month.
With the reduced expenses, the total for phone and internet service comes to $59 per month, which cuts your costs by $81 monthly (or $972 per year).
Trending Now: Retirement Savings: 4 Expenses Retirees Regret Keeping in Their Budgets, According to Experts
Subscriptions and Memberships
“Cutting back on unused or non-essential subscriptions and memberships, such as gym memberships, magazines and club memberships, can lead to substantial savings,” said Taylor Kovar, certified financial planner (CFP) and CEO/founder of Kovar Wealth Management.
With gym memberships averaging $40-$70 per month, a senior could easily spend $480-$840 in a year. Add a year-long subscription to a magazine like National Geographic, and there’s another $70. Similar to streaming and cable, the more memberships you have, the more money you’re spending.
“By carefully evaluating and trimming these expenses, retirees could save upwards of $2,400 annually,” said Kovar.
Costly Habits
“Adjusting habits around dining out, entertainment and travel can also yield significant savings,” Kovar added.
“By reducing these expenses by even 30%, retirees could save around $900 per year,” he explained.
Try opting for more home-cooked meals, taking advantage of senior discounts and seeking free or low-cost entertainment options to help in make these adjustments.
Clothes
“You won’t need business clothes anymore or even business tops for Zoom meetings,” said Angela Dorsey, CFP, registered investment advisor and founder of Dorsey Wealth Management.
According to her, “Your clothing budget should shrink.”
To find your savings, subtract the amount you normally spend on work clothing per month or annually before retirement, which will likely be hundreds of dollars.
For You: I’m an Economist: Here’s My Prediction for Social Security If Biden Wins the 2024 Election
Groceries
“In retirement, you will have more time to fix healthier meals,” Dorsey said. “By not [buying] quick-fix or microwavable meals, you may find that your grocery bill decreases.”
In June 2024, JourneyFoods reported that the average price per serving of home cooked meals was $4.31 while the average cost of eating out was $20.37 per serving.
If you’re paying more than $4.31 for single-serving frozen or prepared meals from the grocery store, you can definitely cut costs by cooking meals yourself. Plus, you’ll likely get the added benefit of less sodium and preservatives.
Ashleigh Ray contributed to the reporting for this article.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Cutting Expenses in Retirement: 9 Things To Downsize (That Aren’t Your Home)
