Ideally, you'll save enough money so that you have the flexibility to cover your bills as needed in retirement. But some seniors reach retirement age having fallen short of that goal. If that's the boat you're in, you may have to make some hard choices.
This especially holds true right now, given the way inflation is soaring. If you don't have a large retirement nest egg to tap and you get the bulk of your income from Social Security, you may be struggling to pay your bills. And if so, it pays to look at cutting these expenses.
Image source: Getty Images.
1. Housing
Even if you enter retirement with a paid-off home, you might still find that you spend more on housing than any other expense category -- including healthcare. That's because the cost of property taxes, homeowners insurance, maintenance, and repairs can add up quickly, and as homes age, upkeep can get more expensive.
If you're paying a lot of money to live in your home, it may be time to consider downsizing to a more affordable space. And now's actually a great time to do that.
Right now, the housing market is red-hot, and buyers are clamoring for the chance to scoop up properties once they become available. Say you're sitting on a paid-off home that could easily command $500,000 in today's market. If you sell it at that price point, you might then be able to purchase a home that's less costly to maintain for $350,000.
At that point, you'll benefit from the large profit you make on your home sale, and also, from cheaper property taxes and upkeep going forward. It's really a win-win.
2. Transportation
You may have needed a car to get to and from work while you still had a job. But if you spend most of your time in retirement close to home and you live in a walkable area, unloading a car could make sense -- even if that means having to spend some money on rideshares when you need them.
Furthermore, unloading a car makes sense right now, given the cost of gas. Fuel prices have soared since the Ukraine conflict broke out, and it doesn't look like consumers will be getting much relief at the pump anytime soon. If you sell your car, you can use the proceeds as income, all the while potentially slashing your monthly costs significantly.
3. Restaurant meals
Those early-bird special seniors love are growing increasingly expensive due to inflation.
And let's be real -- restaurants are not in the business of giving food away, so if there's an early-bird special to be had for $12, chances are, it cost the kitchen $4 to whip it up. That's why it pays to cut back on dining out if you're having a hard time keeping up with your bills.
If you're retired, it means you should, conceivably, have more time on your hands to cook. Start experimenting with recipes and getting creative in the kitchen. It could not only save you money but also gives you something to do with your time so you end up spending less on leisure.
Help your financial situation improve
These days, a lot of seniors are struggling financially as inflation soars and Social Security fails to keep pace. And while next year's Social Security raise could be huge, it might still leave seniors in a comparable situation when we account for higher living costs.
If you're having difficulty managing your bills, it pays to look at cutting back on housing, transportation, and eating out at restaurants. Doing so could help you be able to afford your essential bills without having to skimp on important things like utilities and healthcare.
