Reaching retirement and finding out you don’t have enough money can be devastating.
You don’t want to take too much out of your retirement accounts too fast and jeopardize the chances of your money lasting for life. And to make sure that doesn’t happen, you may need to make some pretty drastic lifestyle changes.
If you’re worried about stretching your savings, making one or all of these four moves could be just the ticket to slashing your expenses dramatically and giving you a lot more breathing room.
1. Move to a cheaper area
Relocating could be the single best step you take to preserve your nest egg and salvage your retirement. If you live someplace where housing, taxes, medical care, or other goods and services are expensive, you’ll inevitably spend more. But by moving to a place where the cost of living is lower, you can take less money out of your savings each year while still covering essential costs.
In many cases, moving to a lower-cost part of the U.S. can lead to a significant reduction in expenses. But if your saving situation is really dire, you may want to look into retiring internationally, where the U.S. dollar has a lot more buying power.
2. Eliminate a vehicle
Cars are expensive. In fact, according to an AAA study, owning a new car in 2021 costs $9,666 over the course of the year.
That’s a lot of money for retirees who are worried about making their savings last. But the high cost of car ownership also provides an opportunity to save.
Seniors used to being a two-vehicle household could free up a lot of cash if they eliminated one car and shared a vehicle with their partner. And those in a one-vehicle household may want to do the math and see if switching to public transportation, while using the occasional ride-sharing service, could help. And sometimes, relocating can also make eliminating one or more vehicles feasible if seniors move to a more walkable area.
3. Downsize your house
If you aren’t ready to uproot yourself totally by moving to a new location, you may still be able to slash expenses by simply changing houses.
Downgrading to a less-expensive house could open up the door to going mortgage-free and slashing housing costs. Or you could get the equity out of your house and into an investment account, where it could help generate income to support you as a retiree.
Apartment dwellers may also want to look into moving to a smaller place to lower rent costs and free up more money for other things.
4. Stop supporting adult children
Finally, if you have older children you’re supporting, putting an end to this arrangement could help you shore up your own financial security. Far too many parents end up sacrificing their future to help adult children. This often doesn’t end up helping anyone in the long run, since those very same kids could end up supporting broke parents whose retirement savings has run out.
The fact is, younger people have more time to build wealth and often have more options for financing their endeavors, such as taking out student loans. But if you’re retired and drain your nest egg because you’re supporting your kids, you may have few ways to recover.
Taking any of these four steps could make a big difference in reducing expenses and helping your money last longer. And the more steps you take, the bigger the impact on your financial security in your later years.