6 Ways To Lower Expenses in Retirement While Still Living a Luxury Lifestyle
One of the greatest fears in life is often not having enough money. In fact, a recent Allianz Life survey found that 63% of Americans are more worried about running out of money than death.
While part of this fear may be psychological, one potential solution is to lower your expenses in retirement so that you can feel more confident you’ll have enough money to last for a lifetime. However, you don’t necessarily want to feel restricted during what’s supposed to be your golden years.
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The good news is that there are ways to lower your expenses in retirement while still living luxuriously. You don’t have to downsize into a smaller home, give up travel or survive on peanut butter and jelly, unless you want to.
To start, consider what matters most to you and what a luxury lifestyle looks like in your eyes. In doing so, you might realize that some expenses, like travel, are non-negotiable, while others like fancy coffees can be cut without affecting you much. Maybe you got into a habit of making certain purchases that you no longer want to make.
“Write down everything that you spend and where, so that you can have a value reconciliation conversation with yourself. Are you getting the value out of your purchases? Do you really care about that $6 latte? It used to be $4 but now it is $6 — might not be worth it for that,” said Kimberly Nelson, advisor at Coastal Bridge Advisors.
If you’re looking for some more inspiration on what you might be able to cut — keeping in mind that these are highly personal decisions — consider the following.
Move To a Lower-Tax State
One way to cut costs while still enabling you to live luxuriously is to move to a lower-tax state or even a state with no income tax, said Nelson.
“You will save money simply by not paying the high income tax rates in many popular states,” she said.
Meanwhile, you can still enjoy luxuries like a nice home and plenty of spending money for entertainment.
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Rent Out Your Home and Car When Traveling
While this technically doesn’t lower your expenses, you can offset the costs of traveling by renting what you’re not using while you’re away, like your home and car, said Emily Luk, co-founder and CEO of Plenty.
You can even use management companies that make it easy to rent out your house through a platform like Airbnb, she said.
Explore Local Attractions
You don’t have to travel far to still live a great life in retirement. You can make the most of your newfound free time by exploring local attractions.
“Become a tourist in your own city,” Nelson said. “Make a list of all the fun, free or very inexpensive things to do in your area.”
Buy in Bulk
If you’re not living paycheck to paycheck, you can take advantage of your retirement nest egg by buying in bulk, thereby saving you money in the long run.
“Shop at Costco and other online wholesale stores for your staples,” Luk said. “Buy more at once and stock up for a whole year.”
Use a Smart Thermostat
You can also save money without feeling like you’re pinching pennies by using a smart thermostat, as Luk said.
Here too, the upfront cost of adding a system like Google Nest can pay off in the long run by way of lower utility bills. Best of all, you can program a smart thermostat so that you don’t even have to feel the effects, you just see the savings.
You can have it “dynamically turn off when you’re not at home,” Luk said.
Re-Evaluate Time vs. Money
Lastly, you can lower your retirement expenses without cramping your lifestyle by re-evaluating how you spend your time and money. You don’t necessarily want to maintain the same spending plan as you did during your working years, considering your priorities and amount of free time may have changed. Maybe now you can cut back on expenses that you’d prefer doing yourself.
“So much of what we spend during our working years is out of convenience. Convenience food, eating out, high-priced hairdressers that live close to us, etc.,” Nelson said. “Begin to look around a bit and see what else you might enjoy as much — or at least almost as much — that costs less than what you are spending now.”
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This article originally appeared on GOBankingRates.com: 6 Ways To Lower Expenses in Retirement While Still Living a Luxury Lifestyle
