According to the Social Security Administration, the median annual household income for married couples over 65 was $50,772 in 2013. However, the U.S. Census Bureau reported recently that the median annual income for those between 55 and 64 was over $57,000. That’s good for a nearly 12% reduction in income.
If you’re already in that boat, or if retirement is fast approaching, it’s time to figure out how you can save some money in retirement. We asked three of our regular investment and retirement planning contributors to offer up a way to save money in retirement. Here’s what they had to say:
Time to trim the fat
Selena Maranjian: One smart way to save money in retirement is to downsize. You can do that in more than one way, too. For example, if you’re married and your household has two cars, you might get rid of one and share the other. It’s not possible for all couples, but if you can swing it, you can save a lot on insurance, fuel, and repairs.
You might also downsize your home. A smaller house will likely cost you less in mortgage payments or rent, property taxes, insurance, utilities, repairs, and upkeep. There is, though, the not-insignificant trouble of packing up and selling your current home and buying, moving to, and setting up a new home. Downsizing can save you a lot of money, but it’s easier said than done. The move itself can be costly, and you’ll likely have to spend a fair amount of time paring down your belongings, too.
Another possibility is to not just move to a smaller home in the same general area but to move to a different region entirely. According to Wallethub.com, the average American household faced $2,089 in property taxes in 2015. But consider that the average rate in Illinois was $3,939, while it was $3,971 and $3,327, respectively, in New Jersey and Texas. Meanwhile, it was only $1,089 and $984, respectively, in Colorado and South Carolina. Moving away from many friends and family is a big deal and not to be undertaken lightly, but do consider relocating if you have sufficient family and/or friends in regions with lower costs of living. (Look beyond property taxes — to income taxes, sales taxes, costs of utilities, home prices, and so on.)