Reducing Expenses for Retired Baby Boomers
By Arthur Andrews
I retired at 56-years-old and did everything right. I had a company retirement plan, the house was paid for, the cars were paid, my debts were zero, and I had a 401k plan and significant savings. Life was good. We traveled, helped our two children with down payments on houses and never touched our savings.
Things changed in 2008 as the government started printing money, which led to reduced income from Certificates of Deposit and increased inflation, which the government conveniently ignored by changing the way they calculated inflation; so there were no cost-of-living increases in Social Security as medical and dental costs soared.
Our interest income plummeted from $25,000 a year to just under $10,000 and is still dropping, leaving us with two choices: either deplete savings or reduce spending. With potential double-digit inflation on the horizon, due to the Federal Reserve’s out-of-control printing of money, the route we took was to cut expenses, while still maintaining a good standard of living.
Ten Simple Changes
We saved money when we:
- * Became a one car family by selling our second car, saving an estimated $3,000 a year.
- * Increased deductibles for car and home insurance to $5,000 and reduced homeowners insurance to reflect current value. Savings were $1,500 a year.
- * Dropped our two cell phones and changed to a prepaid plan, reducing costs by $1,100 per year.
- * Got rid of our large garbage can and dropped to a medium size can, saving $250 a year.
- * Reduced cable TV costs by dropping HBO, Showtime and the number of channels, saving $550 a year.
- * Reduced eating out from twice a week to once a week, saving about $2,000 a year.
- * Limited our travels to last-minute deals during the off-season, such as Europe in March or Hawaii in February. Stayed at small family-run hotels versus the Hilton, saving at least $5000 a year.
- * Bought clothing online with free shipping, saving on sales tax, gas and parking. Savings were an estimated $600 a year.
- * Sold the contents of our Shurgard unit, bringing in $400 and saving $900 in rent.
- * Negotiated fees with dentists and others, often getting an extra 5% discount, saving about $700 a year.
We Saved Over $15,000
The bottom line is that we cut expenses by over $15,600. If you have a mortgage with adequate equity, you can refinance at today’s low rates and save thousands. There are other small ways to save money and it all adds up.
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