A Few Ways to Cut Retirement Expenses

Posted on: March 29th, 2010 by

Financial Planner - Nest EggVery few Americans are saving enough to finance a 30 year retirement.  Because of that, they are left with two choices: learn to survive on a lower income or delay retirement.  There are some frugal strategies that can help you stretch your retirement nest egg though:

1) Downsize your home – Once your kids move out of the house, there is no reason for you to own a multiple bedroom house in a great school district anymore.  Any financial planner will tell you that its not the mortgage, its the maintenance.  This will allow you to pad your nest egg with the money you are saving on upkeep.

2) Get rid of a vehicle – Eliminating your commute is probably one of the best perks to being retired.  Couples may longer need two vehicles when they are not traveling to separate offices.  This will, again, save on maintenance and insurance premiums.

3) Sign up for Medicare on time – Seniors can sign up for Medicare during a 7 month period beginning 3 months before their 65th birthday.  Fill out the application right away to avoid the Medicare Part B premium increase of 10% for each 12-month period of delayed enrollment.  Seniors who are still working and receive health insurance through their employer after age 65 need to enroll within 8 months of leaving the job to avoid penalty.

4) Find the BEST Medicare Part D prescription drug plan – Every year, the premiums, deductibles, and cost-sharing provisions of Medicare Part D prescription drug plans change.  Retirees should go to medicare.gov and compare expected out of pocket cost for necessary drugs under all the plans available in their area.  You are able to switch plans once a year during the open enrollment period.

The best plan is always to seek the advice of a financial planner and work with him/her to determine what you may expect to spend throughout your retirement and come up with the best saving and spending plan that works for you.



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