For most people, retirement is a chance to sit back and enjoy the fruits of a life’s worth of labor. However, caution, especially with respect to finances, is an important element of retirement, as no retiree wants to outlive his or her money. But living on a fixed income doesn’t mean you have to pinch every penny.
Instead, the following tips can help you enjoy retirement while also decreasing the likelihood your money will run out too early.
• Consider reducing insurance costs. Seniors who are parents often have life insurance policies that will pay out to their children in the case of their death. However, as you get older and your children cultivate their own wealth, you can begin to carry less insurance. While you’ll still want to carry some life insurance should you predecease your spouse, if your children have established themselves financially, you can save money by reducing your life insurance coverage.
Another way to reduce insurance costs is by raising your deductible. If you currently have a small ($250) or standard ($500) deductible on auto or home insurance, consider raising the deductible to $1,000. While you’ll have to pay more money up front in the case of an accident, you’ll save money on your insurance every year.
• Ask about generic prescriptions. Many seniors earmark a substantial amount of money each month for prescriptions. For some seniors, monthly prescription bills can be jaw-dropping. Ask your doctor if the drug you need is available in a generic prescription, which is often far less expensive while just as effective. Also, don’t use the neighborhood pharmacy simply because it’s nearby. Prices on medications vary from pharmacy to pharmacy. A little leg work can save you money each month.
• Inquire about senior discounts. Many seniors will say one of the best things about being a senior citizen is the numerous discounts available on everything from hotels to restaurants to movie admissions. However, if you don’t ask about a possible discount, you probably won’t be told. Some credit card companies even lower the interest rates for senior citizens, a discount that could save you more money than the rest of the discounts combined.
While discounts can be great, it’s also important not to just accept the senior discount as the best offer out there. For example, a senior discount on an airline flight might seem like a great deal, but might not look so great when compared to the host of online booking Web sites that offer far bigger discounts. Before you make any big- ticket purchases, be it for travel or anything else that has a price tag in the hundreds or thousands of dollars, be sure to shop around. Just because some retailer offers a senior discount doesn’t make it the best deal out there.
• Avoid using credit if possible. Many retirees discover in retirement that they spend more than they ever thought they would before they retired. This is due to several factors, from having more free time to spend and shop to having more leisure to pursue activities that can be expensive.
Also, many seniors love to travel, which is almost always expensive. If you find yourself spending more than you thought you would, avoid using credit when making purchases. Using credit too much can lead to large interest charges, especially if a medical emergency arises and you don’t pay the balance in full by the due date. While it’s a good feeling to spend all that money you saved during your working years, it’s better to avoid spending so much of it on interest fees.