The average Social Security check in 2019 was about $1,465 a month for a 66-year-old, according to The Motley Fool. However, according to the Bureau of Labor Statistics, the average income for someone who was between the ages of 55 and 64 was $50,232, which comes to $4,186/month. That is nearly a $2,500 decrease in income when transitioning into retirement.
You may quickly find out your lifestyle will change a bit in retirement. Even with supplemental income from a pension or 401(k), it pays to be careful with your spending. Here are some tips to help you stretch your money.
1. Don’t pay for more space than you need
Usually, people retire in the same house they raised their kids. According to Statista, the average American household has about 2 kids. That means you probably have more space than you need once you become an empty nester.
If you still owe a monthly mortgage payment, consider selling your house. Then, use the equity from that house to downsize to a fully paid-off smaller home. You may consider doing the same even if you have paid off your current home.
2. Sign up for your grocery store’s discount card
Most grocery stores have some kind of reward program or card that allows you to save money on everyday items. Usually, these programs and cards don’t cost you anything. For example, Tom Thumb has a savings card that is completely free to have. Your loyalty card can save nearly $100 on your monthly grocery bill.
3. Buy some things in bulk
In addition to grocery store savings programs, shopping in bulk can help you be frugal in retirement. Of course, you can’t buy everything in bulk, but things like paper products or cleaning supplies are great.
4. Change your TV provider
You can get TV in nearly any form—you’re no longer stuck paying for an expensive cable package every month. Consider discontinuing your TV provider’s plan and getting an Amazon Fire Stick or Roku. These devices are affordable and pay for themselves within months. With these devices, you’ll have access to apps with both live and recorded TV shows as well as movies.
5. Keep a lookout for senior discounts
Senior discounts are everywhere, you just have to remember to ask about them. Most restaurants, retail stores, and entertainment venues offer value-priced senior options. They may only be a few dollars here and there, but over the course of a year, the discounts add up.
6. Only travel when you can find good deals
Try to be a savvy traveler by traveling in the off season, booking your flights early on or buying seats last-minute where possible, or by booking group tours at a discounted price. There are literally a hundred ways to slash prices while traveling. Be sure to do some research on how you can find the best deals before you set off on your adventure.
7. Shop your Medicare plans each year
Medicare plans can change prices from year to year. Because of this, you should always try to shop your plan each year to find the lowest prices. If you have a Medicare Supplement plan, you can shop your rate at any time of the year.
However, if you have a Medicare Advantage plan, you can only change plans during the Fall Open Enrollment Period, also known as the Annual Election Period. Same goes for Part D drug plans. Shopping your rates can cut your premiums so you’ll have a little extra cash each month.
8. Stick to your budget
If you aren’t in the habit of writing a budget and comparing your costs each month, retirement is a great time to get started. It’s easy to overspend and when you’re on a fixed income, overspending may mean dipping into retirement savings or running up your credit card—another monthly payment to worry about.
Even if you’re not ready to retire, start cultivating frugal habits now so you can save more before retirement and be ready to live comfortably with your budget.