There's no single, specific amount that will guarantee you financial security throughout your retirement. As a general rule, it's good to close out your career with 10 to 12 times your ending salary on hand in your IRA or 401(k) plan. That, combined with income from Social Security, could be enough to cover your senior living expenses and leave you with enough money left over to enjoy your newfound free time.
But for some people, saving for retirement is a real struggle. And you may be approaching the tail end of your career with little money socked away for your senior years.
If so, you clearly can't go back in time and sneak more money into your account. But one thing you can do is make lifestyle changes that compensate for your lack of savings. Here are a few to consider.
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1. Downsize your living space
If you're nearing retirement, it may be that you own your home outright, or that you will before your career wraps up for good. If that's the case, downsizing your living space could really help make up for limited savings.
First of all, a smaller home should be less expensive to heat, cool, and maintain than a larger one. And if you stay in the same area but dump some square footage, your property tax bill could shrink, as could your homeowners insurance premiums.
But also, if you own your home mortgage-free, or have a lot of equity in it, then selling a larger space and buying a smaller one could leave you with a chunk of cash to pocket. You can then invest that money to generate some growth and tap it as you would an IRA or 401(k) when you need income to keep up with your expenses.
2. Get rid of a car
When you work full-time, it's often the case that you need a vehicle to get to work. But once you're retired, you may not need to use a car every day, even if you live someplace without much public transportation. And so getting rid of a car could end up saving you a lot of money.
AAA reports that it costs an average of $9,666 a year, or $805.50 per month, to own a car. Now, imagine that in the absence of having a job to report to daily, you only need a car twice a week to run errands and get to activities. Even if you spend $50 a day on a ride-sharing service, or $100 a week, that's still considerably cheaper than the cost of owning a vehicle of your own.
3. Cook your own meals
Even though seniors are often privy to discounted meals at restaurants, it's still a lot less expensive to cook your own food at home. And if you're coming into retirement with little in the way of savings, you may need to plan on honing your culinary skills to stretch your limited income as much as you can.
That said, cooking meals doesn't have to be torturous. You can find some free cooking classes online and pick up tips that make meal prep easier. Just as importantly, you can turning cooking into a social event by hosting potlucks or inviting fellow retirees over to join you in the kitchen and enjoying your concoctions together.
Not everyone enters retirement with a heaping pile of savings. If you're not thrilled with the state of your nest egg, these moves could help you shrink your retirement costs and reduce your financial stress in the process.
