Opinion: 7 Ways Baby Boomers Can Cut Costs Before Retiring
Retirement is supposed to be a time for travel, hobbies, and enjoying the company of grandchildren. Unfortunately, many Americans are unprepared for this phase of life financially. The average retirement account balance among Vanguard plan participants is $141,542, while the median is just $35,345. This means baby boomers approaching retirement need to focus on saving more. One way to do that is by cutting expenses. Here are seven ways baby boomers can save money before retiring:
1. Get out of debt: Pay off credit card balances and other debts before retirement. Eliminating debt reduces expenses and stress, which can help ensure retirement savings last.
2. Downsize your home: If your current home exceeds your needs, consider downsizing to save money on taxes, maintenance, utilities, and other expenses.
3. Hack your monthly bills: Negotiate rates with providers, cancel unused subscriptions, increase insurance deductibles, unplug unused gadgets, and switch to cheaper providers. Shopping around for auto insurance can also lead to savings.
4. Cut grocery expenses: Planning meals, taking inventory of what’s in the fridge, and using rewards apps can reduce grocery costs. Americans spend $4,942 annually on groceries, and an estimated 40% of that food ends up in the trash.
5. Plan vacations carefully: Travel can be expensive, especially for retirees. Baby boomers can save money by taking advantage of senior discounts, using travel rewards programs, and researching affordable accommodations.
6. Consider a part-time job: A part-time job can provide supplemental income and help delay drawing from retirement savings. It can also provide social connections and a sense of purpose.
7. Invest in your health: Prioritizing your health through exercise and healthy eating can reduce medical expenses in retirement. Additionally, staying healthy can allow for more time spent doing the activities you enjoy.
Baby boomers can cut costs and increase retirement savings by following these tips. While some may prove more difficult than others, they are all worth the effort. By taking a proactive approach to saving money, baby boomers can enjoy the retirement they deserve.
Related Facts:
– The average retirement age for baby boomers is 65.
– A Fidelity Investments study found that retirees will likely need 80% of their pre-retirement income to maintain their standard of living.
– In retirement, medical expenses can be a significant cost. A couple retiring in 2021 at age 65 can expect to spend $300,000 on healthcare costs, according to Fidelity Investments.
Key Takeaway:
Baby boomers approaching retirement need to focus on saving more money, and cutting expenses is one way to achieve that goal. By eliminating debt, downsizing, hacking monthly bills, reducing grocery expenses, planning vacations carefully, considering part-time work, and investing in their health, baby boomers can make their retirement dreams a reality. Planning ahead and being proactive can lead to a fulfilling retirement without financial worries.
Conclusion:
Baby boomers have worked hard to get to where they are today, and they deserve a comfortable retirement. By taking steps to reduce expenses, they can increase their retirement savings and enjoy the carefree years they’ve envisioned. Whether it’s downsizing their home, negotiating bills, or investing in their health, baby boomers can take control of their financial future. As retirement approaches, it’s important to focus on what matters most: spending time with loved ones and doing the things that bring joy and fulfillment.
