Retirement can be a whirlwind of emotions and concerns regarding everything from extra time to setting up a fixed budget. Depending on your lifestyle and what kind of portfolio you created obviously a fixed budget will be one of your more major concerns. Figuring ways to cut costs after retirement will help you re-adjust accordingly.
Let Go of the Big Space
Once retirement sets in chances are you probably will not need as much space as you had throughout the years. Whether a house that is no longer filled with children or an apartment with an extra bedroom you do not need, cutting costs begins with your living expenses and lowering your mortgage or rent is essential. Downsize to a more affordable living space and add the extra money you would have spent to your weekly income take. If you need to have something new, like a television or some other electronic, consider leasing it from Presta to keep your costs down instead of making a huge purchase.
Schedule Taxable Withdrawals
Assess your portfolio or income potential and determine what will be taxed if withdrawn. Start with the highest taxable income and move from there. That means, if possible, that you do not touch your 401(k) or IRA until all other taxable assets are depleted. This will spread out your owed taxes at the end of the year rather than be hit with a barrage of fees according to random, unplanned withdrawals. NOTE: The IRS requires that at age seventy-and-a-half you begin taking required minimum distributions from retirement accounts each year or you can be open to a 50% tax penalty.
Go Easy on the Kids and Grand-Kids
As much as you want to continue to spoil family remember that you are locked into a scrutinized spending plan. Let your family know that as much as you would like to buy them expensive items they may not be able to afford, now you are going to have to pull back to keep your budget strong. Instead, give them your time such as visiting often or babysitting which goes a long way especially for a stressed out double parent working home.
Attack Your Debt
Before you retire do everything in your power to pay off, consolidate or re-adjust your accrued debt. The last thing you want hanging over your head when you no longer have flowing income is credit card interest rates, mortgage payments or a car bill every month.
Do Not Be Shy
You worked hard all your life so there is no reason not to take advantage of senior citizen discounts. Some businesses welcome giving a break to seniors but others keep such reductions on the down low unless you ask. Do not be ashamed of these perks and look at it as not a hand-out but a reward for making it this far.
Cutting costs after retirement takes a keen eye, steadfast budgeting and the ability to work with a good financial planner for an in depth look at more ways you can get your due. Overall, making sure you are able to enjoy yourself as much as possible is just as important as your budget.