5 Expenses Retirees Should Cut Before Turning 70
Written by
John Schmoll
Edited by
Jenna Klaverweiden
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It’s not uncommon for retirees over 70 to live on a fixed income. For those who are no longer working, they likely have different income sources. The combination necessitates wise spending to ensure you have enough resources to make it through retirement.
Cutting expenses earlier gives you time to test what works and build new habits to carry into retirement without feeling like you have to aggressively slash everything later. Here are five expenses that can help you do that.
Also see five expenses most retirees underestimate that could cost them thousands.
1. Unused Subscriptions
It seems like everything has a subscription today. A small monthly charge doesn’t seem too harsh, but when subscriptions multiply, it’s easy for those recurring charges to increase needlessly.
The average American adult is spending nearly $1,100 annually on subscriptions, according to CNET. Worse yet, $200 of that is on unused subscriptions. Review your bank and credit card statements for several months to identify all of your subscriptions. If you can’t remember using the service in the last two to three months, cut it.
2. Housing Costs That Don’t Match Your Life
Housing is typically the largest component of a budget. A growing number of Americans are overspending on housing, spending more than 30% of their income. Roughly 43.5 million American households are in that category, according to Harvard’s Joint Center for Housing Studies.
Take time to identify a solution to reduce costs. Downsizing to a smaller house that fits your needs can help you recoup savings.
3. Gift Giving
Giving gifts, when done right, brings joy to everyone. Overspending on gifts or supporting adult children financially can easily burden a retiree’s budget. It’s prudent to speak with adult children now to clearly set expectations if support has been given in the past.
Establishing an annual budget and setting boundaries can help bring clarity. You don’t have to cut generosity, but do it in light of your changing needs and budget.
4. Unnecessary Insurance
Insurance needs change as you age. Left unchecked, it’s easy to overlook how those changes can affect your finances. Some coverage may no longer be necessary, and some may need tweaks.
For example, if you’re now driving less, informing your provider can reduce rates. Bundling and comparing rates, plus revisiting deductibles annually, is a good practice for identifying potential savings.
5. Telecom Costs
Telecommunications costs, like phone and cable bills, can easily get expensive. No-contract cell carriers are a good way to slash cellphone bills without sacrificing coverage. For TV costs, consider subscribing to a streaming service to meet your viewing needs. Even opting for a couple of non-premium streaming apps can save significant money each month.
Most cuts that are best to make before turning 70 are recurring costs that don’t necessarily improve daily life. Identify a couple to cut right now to see if you can live with the change. If you can, apply the savings to other needs. Revisit all major expenses this way. Even if you don’t slash everything, you can claim savings that stretch your budget.
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