3 Retirement Budgeting Tips

Whatever the size of your nest egg, stretching retirement dollars will help you build security, reduce stress and stay in control of your money.

Kallee Feuz Mar 19, 2021

You spent years working and saving for retirement. Now it’s time to make the most of your nest egg. That means spending — and saving — strategically so you have money for the things that matter most.

Most people believe they are doing well in retirement. Nearly 70% of retirees report that their standard of living is the same or higher in retirement than when they were working, according to the Employee Benefit Research Institute’s Spending in Retirement Survey.  

The survey found that while retirees ages 62-75 generally feel good about their spending levels, they also recognize the importance of saving. A majority (64%) of retirees say that saving as much as they can makes them feel happy and fulfilled.

Whatever the size of your nest egg, stretching retirement dollars will help you build security, reduce stress and stay in control of your money.

Following are 3 tips for saving money during retirement.

Retirement budgeting tip #1: Take a birds-eye view of your finances

Before you can save money, you need to know how you’re spending it. Review your recent bank and credit card statements to see where your money is going each month. Using a free home budgeting calculator can help you see the big picture.

For budgeting purposes, personal expenses can be divided into two categories:

  • Fixed expenses are the regularly occurring costs that generally stay the same from month to month or period to period. The mortgage or rent payment, car payment, insurance premiums and cable bill are fixed expenses.
  • Variable expenses are harder to estimate because they tend to fluctuate. Groceries, clothes, entertainment, and home and car repairs are examples of variable expenses.

Retirement budgeting tip #2: Save on fixed costs

Despite their name, fixed costs aren’t set in stone. However, lowering your fixed costs will require a time investment. That might mean renegotiating a bill, refinancing a loan or canceling a membership.

Fixed costs typically take up the largest portion of your budget, so the savings potential is significant. And once you’ve made the initial time investment of lowering the cost, you won’t have to make day-to-day decisions on these bills; the savings is automatic.

  • Downsize. Baby boomers spend about 30% of their monthly budget on housing-related costs, including housing, utilities and housekeeping, according to SmartAsset.  If housing costs are eating up your nest egg, consider downsizing or moving to an area with a lower cost of living. Downsizing your home could reduce your mortgage payment and may even get rid of it. And a smaller living space may translate to savings on variable expenses like utilities and home maintenance costs. Depending on your transportation needs in retirement, consider downsizing your vehicles to become a one-car household.
  • Refinance. If your mortgage isn’t paid off, you may be able lock in a lower interest rate save in overall costs of your mortgage. A Zions Bank home refinance loan* could reduce your loan term or the cost of your monthly payments. Additionally, if your credit has improved since you bought your car, you may save money by refinancing your auto loan.
  • Comparison shop. Take time to shop for better deals on home and auto insurance to make sure you’re getting the best price for your coverage. Consider whether your Medicare prescription drug plan or Medicare supplement plan is the best priced for your situation.
  • Reevaluate. Have you taken on memberships or subscriptions over the years that you no longer use? Perhaps your Medicare plan offers a SilverSneakers benefit that can replace your existing gym membership. Or perhaps you can cancel a television streaming service or cable package that you rarely watch.

Retirement budgeting tip #3: Save on variable costs

Lowering your variable costs requires a daily commitment to cut spending. That’s because variable costs like groceries, clothes, and even your electricity bill, fluctuate from month to month. Dust off and recalibrate your budget to accommodate your shifting priorities and spending needs in retirement. Following a budget is the best way to keep these variable costs in check and curb temptations to impulse spend.

  • Capitalize on time. Assuming you have more time in retirement, you can use this currency to save money. Cook at home, learn to tackle home repair projects, and schedule travel during off-peak seasons.
  • Take advantage of senior discounts. From restaurants to clothing shops to hotel chains, thousands of companies across the country offer discounts for retirees. Shopping certain days of the week or asking retailers about their offerings for seniors can boost your retirement budget.
  • Maximize credit card rewards. Rack up reward points for travel and everyday spending when you leverage you credit card’s existing rewards program or sign up for a rewards credit card that aligns with your spending habits.
  • Stay healthy. Out-of-pocket medical expenses can eat away at your assets or income significantly as you get older. By eating healthy and exercising, you can cut down on out-of-pocket medical expenses substantially.

No matter the size of your nest egg, saving money in retirement will help you live richly through your golden years.

*Subject to credit approval. Terms and conditions apply. See banker for details.

Kallee Feuz is a Public Relations officer for Zions Bank.

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