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Cutting your costs during retirement

Most of us dream of a carefree retirement free from the shackles of the rat race. However, our main source of income stopping can be a scary prospect, especially if our pension income is considerably less than we’re used to receiving each month. However, there are many things you can do to ensure your retirement is as close as possible to your ideal retirement.

Plan ahead

This article will help provide tips for cutting your costs once you’re retired but planning before you retire is too important not to mention. Having a comprehensive plan in place will remove much of the retirement anxiety. It’s often the not knowing that causes the most concern. Not knowing how much you’re going to receive each month. Not knowing if it’s enough to cover your expenses. Not knowing if you’re going to be able to afford the pursuits you’ve been putting off until retirement.

Spending time sitting down with a great independent financial planner can help you to structure your retirement in a way that maximises your income and minimises your expenses, allowing you to gain the most enjoyment from your resources.

Start with a list

One of the first steps to ensuring you enjoy your retirement is building a clear picture of your situation. One of the easiest ways to do this is to make a list of all your income and expenses. Look at your last three months expenses and list your outgoings. For costs that vary, such as your weekly food shop, you can take an average. Make your list of expenses as comprehensive as possible. This allows you to look at areas you can potentially cut your costs, as well as giving you a figure to work to.

You should create a similar list for all your income. This can include your state pension, additional pensions, such as an occupational pension, benefits, or any paid work you still undertake in your retirement. Hopefully your income figure is higher than your expenses figure, but for many people these two figures are too close for comfort.

These lists will give you an idea of where you stand in the most basic sense. However, there’s a good chance that when you retire, you’ll want to start new pursuits or travel more, which will increase your expenses further. You can estimate the additional costs enjoying the retirement you want might cost you, just to give you a rough idea of where you need to get to financially.

What’s next?

Now you have a comprehensive picture of your situation, you can start making changes to move your finances in the right direction. Some of the changes can be drastic, while others are more a case of fine tuning. Below are some of the things worth considering as potential ways to reduce your expenses during your retirement.

Transport – If you’re currently a two-car family, then it’s worth asking yourself whether you need to retain both vehicles in retirement. A second car can be a costly expense that’s unnecessary when two people no longer need to make a daily commute.

Property – If you’re rattling around in a property that was purchased when you had children living at home, then downsizing your property can be a great way to free up a large amount of cash to boost your retirement. It can also allow you to clear any remaining debts that eat into your monthly budget. A smaller property usually also means lower bills.

Make your money work for you – If you have any savings or investments, it’s worth speaking to an independent financial advisor to ensure you’re getting the most from your money. Some people leave money sitting in a savings account with virtually no return, or keep investments sitting there for many years without reviewing them. The truth is that new products and changes to the market often mean there’s a better way to increase your income.

Cut household bills – While the savings might be modest, switching your energy supplier or getting rid of your landline phone can help to knock a little more of your monthly expenses. Anything you can comfortably live without and doesn’t reduce your quality of life is fair game.

Take advantage of discounts – There are lots of special discount cards and lower rates for pensioners. These can be shopping discounts to help reduce the amount you spend on the essentials, or they can be cheaper entry prices to places you’d like to visit. Don’t be afraid to play the pensioner card, it can save you money.

Consider what your retirement will look like

Many people look forward to having very little to do in retirement. However, the novelty can wear off quickly if you’re still an active person. Some people take part time jobs to help keep their bodies and minds active. As well as having something to keep you busy for a few hours a week, a part time job can provide welcome additional income.

Retirement is best approached with a two-pronged attitude. Firstly, you want to increase your income to the highest level possible while still being essentially retired. Secondly, you want to reduce your expenses to provide you with the maximum amount of residual income to enjoy your retirement with. The aim is to live better while spending less.

Where can I get help with my retirement?

The prospect of retirement can be daunting, which is perhaps why so many people delay thinking seriously about it until it’s close. However, having professionals in your corner can help to remove the unknown aspects. They can help to build a comprehensive and realistic picture of how your retirement will look and give you a well laid out plan to work to.

Mason Wealth Management have over 30-years’ experience helping the people of Ireland to get improved returns, reduce their costs, and minimise the financial risks they face in retirement. We provide a tailored plan and a friendly face you can always turn to. Even people that have been retired for some time can improve their finances. Get in touch to see how we can help you.