“Though it is always the safest to prepare financially for a retirement that matches your lifestyle pre-retirement, some retirees do opt for a minimalist retirement.”
Most people would prefer the same lifestyle in retirement as they enjoyed during their working years, but often, this isn’t an option. After all, few Americans are on target to save enough for retirement. In fact, nearly half of all working-age families have no retirement account savings. If your nest egg isn’t as large as you’d like, consider these minimalist retirement strategies for saving more.
Think about downsizing. Over the long term, downsizing will nearly always save you money, not only in the mortgage or rent payment, but also in maintenance, utility and insurance costs. If you expect to stay in your new smaller home for several years or more, downsizing is probably a good idea. As long as you’re still working, make sure the savings go straight into your retirement account.
You might be looking for a shorter-term solution, though, perhaps due to an anticipated need to move into assisted housing or a plan to live with one of your children in a few years. In this situation, you’ll need to run the numbers to see whether downsizing might actually be more expensive. If you own your home, 5% or more of the sales price may pay the Realtor commissions, and moving is expensive, especially if you need to hire help for packing.
Want to travel after retirement? You’d dreamed of luxury vacations, but you can’t afford it. After all, you’ll be paying for your home while you’re gone. What if you instead let your lease expire, or rent out your home, and then travel for six months or more? Many people have found the savings from not paying for their home pays for their travel.
“Retirement: It’s nice to get out of the rat race, but you have to learn to get along with less cheese.”
– Gene Perret
Eat more simply. While the above quote refers to metaphorical cheese, eating fewer animal products can save a lot of money. Beans and grains are nutritious and imminently affordable. If you’ve spent your life cooking “meat and three” type meals, visit your local library for some vegan, vegetarian and flexitarian cookbooks. Online, Minimalist Baker and Oh She Glows have some excellent recipes.
Is there any (reasonable) way to have one fewer car? This is probably easier if you’re retired, but if you’re still working, perhaps you and your partner can carpool, or one (or both) of you can take public transportation. Maybe one of you can bike or walk where you need to go.
Research insurance. Insurance is one of the few areas where you can save hundreds of dollars a year (or more) without having to change your life at all. Shop around and ask what discounts are available.
“The longer you work, the more money you’ll have for retirement. But the longer you work, the less time you’ll have to enjoy that retirement.”
– Wall Street Journal
An easy way to save. Set aside bonuses, tax refunds and raises. Instead of considering these amounts spending money, put them into your retirement savings account. The same goes for inheritances and other windfalls.
Visit a financial planner. Maybe you’ll learn that a particular investment product is perfect for your situation. Even if you don’t plan to switch over your investments, you might learn some helpful tips about maximizing your Social Security benefits.
Read more about minimalism. Learn how to spend your money on the things that matter, and save the rest for retirement. Maybe you’ll cancel your cable subscription or gym membership. Maybe Starbucks will become a once-a-month treat instead of a daily habit. Or perhaps you’ll decide a Toyota makes you just as happy as a BMW.
Focus on what’s most important in your life. You may not even notice you’re spending less – other than by reviewing your retirement account statements.