How to Live Happily on Your Retirement Income
Many things can get in the way of our ability to save as much as we’d hoped for retirement, whether it’s repaying student loans for much of adulthood, encountering emergencies or medical expenses, or experiencing unpredictable employment.
Fortunately, if you haven’t been able to save enough, you have options to help you boost your retirement income.
Work Part-Time
Working during retirement is a reality for many individuals. Whether it’s to supplement their income, to stay physically and mentally busy, or to have fun and make friends, seniors remain in the workforce for much longer – a trend that’s expected to continue.
Downsize
Minimizing your living expenses by downsizing can give you more breathing room in your budget and more cash to put toward things you love, as well as encourage a more sustainable lifestyle. A multifaceted approach to downsizing is often the most effective.
- Shrink your housing costs. Moving into a smaller place in a more affordable part of town can reduce your living expenses by a notable amount, especially if your current home is large or not fully paid off. Consider making this change if it would decrease expenses like your mortgage or property taxes.
- Profit from your unused items. Old furniture, instruments, clothing, and other items that have been kept in your attic, basement, or storage unit for years could earn you some cash. Host a garage sale or list items on digital marketplaces to have more space in your home and more cash in your pocket.
- Rethink your transportation. If you have more than one vehicle or live in an area with affordable public transportation options, consider selling your car. This can help decrease your total debt and ongoing expenses like auto insurance, registration, fuel, and maintenance.
- Make and maintain an updated budget. Your post-retirement needs, wants, income, and financial goals are likely different than your pre-retirement ones, so you need a budget that reflects this. Calculate your annual retirement income – including from Social Security, personal savings, retirement accounts, and investments – and determine if it will cover your current expenses. Then, review your expenses to identify opportunities to cut back, such as eliminating unused subscriptions or switching to less expensive grocery brands. Even changes that seem small can have a big impact on your finances over time
Relocate
The work-from-home phenomenon has opened up relocation opportunities for many, including part-time retirees, but not every place will offer a more affordable cost of living. Before moving, research aspects like sales tax, income tax, property tax, food and fuel prices, home prices, income levels, and approximate utility costs to get a real sense of an area’s affordability.
Several states in the U.S. are popular destinations for retirees. Florida offers beachfront living and robust retirement communities, with more than 20% of the state’s population aged 65 or older. It also has no state income tax, so more of your retirement income – such as Social Security benefits or a pension – goes right into your pocket. Tennessee, Texas, and Wyoming don’t have state income tax, either.
Another frequent choice for retirees is Arizona, which boasts a warm, dry, and stable climate; numerous retirement communities; and low income and property taxes. North and South Carolina are also popular options for their climate, competitive cost of living, and appealing lifestyle considerations, such as recreational activities. Both states also offer programs that allow retirees to take college courses tuition-free.
If you’re ready for an even bigger adventure, you could join the numerous retirees who decide to live out their golden years in foreign lands. Reasons to retire abroad include experiencing different cultures, having more travel opportunities, living in your ideal climate, or connecting with your heritage. One of the biggest motivators, however, is the improved financial prospects.
With a few adjustments to your lifestyle and expenses – and being open to the possibility of working during retirement – you can build a healthier financial picture to support your golden years.
