After working hard and providing for your family for all of these years, you are likely counting down the days until retirement and beginning, as The Beach Boys once said, that “endless summer.” Or maybe you are already retired and looking to make some financial adjustments because you realize that life doesn’t stop when you reach retirement.
According to a recent Bankrate study, 45% of the working population don’t believe they will have enough to retire comfortably and maintain their current lifestyle throughout their retirement years. To add to the pressure, retirees must take into account that the market will continue to be unpredictable with periods of volatility, potential cost of living increases, and important life transitions such as births, marriages, and divorces. Additionally, unforeseen emergencies could arise, and every one of these events could impact you financially.
Frivolous spending can create problems for retirees, especially for those no longer generating any income or one as high as they did while working. One way to change your spending habits and cut back on non-necessities is by modifying (or downsizing) the necessities you have. Here are five things to consider when downsizing for retirement:
Downsize to a smaller, more affordable home
The idea of downsizing is moving from a larger home with more expensive bills to something smaller to save money. When you think about all of the expenses required to maintain a nice house and property, the amount can be significant. If you are willing to downsize, you may be able to mitigate home maintenance bills, lawn care and landscaping expenses, as well as property and other local taxes. Do your research and meet with your financial professional to decide what is most appropriate for you.
Trade in your expensive car for a cheaper option
Your kids are out of the house, and you and your spouse are empty nesters and preparing for retirement. For years, driving a larger, expensive car made sense, but not anymore. Consider trading your expensive car in for a cheaper option. You can save on service fees and may also have a lower payment if you decide to finance.
Modify your cell phone, cable/streaming apps, and internet plan
For years, many of us have been tied to specific cell phones, cable/streaming apps, and internet plans. Over time, these companies tend to raise our bills to the point where we pay much more than when we started. Consider researching and seeking less pricey options.
Cook more meals at home and eat out less
Altering your dining habits can save you money in several ways. Eating at a restaurant is incredibly expensive. Not only can it save you money, but regularly eating out may also contribute to long-term health issues, which may subject you or your family to high long-term care costs.
Consult a financial professional
Downsizing involves making decisions that can significantly impact your finances throughout retirement. Consulting a financial professional can help you address concerns, provide tips on ways to preserve wealth, modify your spending habits, and mitigate potential risk from future market uncertainty or unexpected events.
Request a complimentary consultation, either in-person or virtually, with a Financial Advisor at Elements Wealth Management.
Sources
- Trade in Your Car with a Loan for Cheaper Car (caranddriver.com)
- Downsizing a Home? 13 Tips to Get You Started | LendingTree
Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions
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