4 in 10 Retirees Are Short on Savings — 4 Costs They Should Cut First
Nearly half of retirees are being forced to rethink their finances. Among Americans who are fully retired, 42% say their savings fall short and require lifestyle changes, according to a recent ZipRecruiter report.
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When it comes to cutting costs in retirement, it's important to be strategic and focus on the categories that most impact your bottom line. Here's where experts say to start.
Reduce Housing Costs First
“When retirees realize their savings might not go as far as expected, I generally recommend evaluating larger recurring expenses that have the biggest long-term impact," said Sarah Whitmore, financial advisor at Mutual of Omaha. "Housing is one of the biggest areas to review."
Cutting housing costs may mean downsizing, relocating or reducing maintenance and utility expenses.
Cut Back on Transportation Expenses
Transportation is often the second-largest retirement expense.
"Carrying multiple vehicles, frequent car upgrades or high insurance costs can drain retirement income faster than people realize," said Scott Schuebel, CEO and managing partner at Statera Advisors. "Reducing to one vehicle or extending the life of a paid-off car can create meaningful monthly savings."
Limit Financial Support for Adult Children
Many retirees are still providing financial support to their adult children, even if it's to their own detriment.
"Retirees will cut vacations before they cut their 32-year-old son's cellphone bill," said Julian B. Morris, founder and principal at Concierge Wealth Management. "Emotionally, that's understandable; financially, it can be devastating over a 25- to 30-year retirement."
Morris noted that many retirees are still paying for family phone plans, streaming services, car insurance, AAA plans, travel, rent support or emergency bills for adult children.
"At some point, retirees have to put their foot down and stop funding other adults at the expense of their own financial security," he said.
Eliminate Unused Subscriptions and Memberships
Smaller recurring charges can quietly drain retirement savings — especially when left unchecked. These might be services you're paying for and not using, or services you are paying more for than you need to: streaming services, gym memberships, country club memberships, warehouse club dues, meal delivery services, unoptimized cellphone plans, pricey cable TV packages and redundant home security services.
"These expenses cost $200 to $500 monthly," said Cody Schuiteboer, president and CEO of Best Interest Financial.
While each category may seem manageable on its own, together they can significantly erode retirement savings over time. Starting with high-impact expenses — and eliminating what no longer serves you — can help stretch your retirement income further.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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