Let’s face it – delaying retirement is not something you are will feel delighted about.
You may be reluctant to do so even knowing you have shortfall in your retirement nest egg.
If you don’t want to delay your retirement until you reach your savings goals, you need to use a more creative and efficient solution.
For most people, spending a little less is a lot easier than figuring out how to save another $300,000, especially if retirement is looming large and it means having to work longer than your heart desires.
By learning to live simply, you can enjoy financial freedom sooner. The key to retiring successfully on less is to find a balanced level of spending that fits your needs without compromising happiness.
1. Less Possessions = More Retirement Savings
It’s superbly easy to save 1,000 per month when you tackle the biggest ticket items first.
For instance, if you are now an empty nester, you may find yourself with more spaces than you need.
The fact is, there are multiple advantages to moving into a smaller home including lower maintenance costs, reduced insurance premiums, and fewer headaches to deal with.
By downsizing your home, you can give your retirement savings shortfall a one-two punch by converting home equity into investment savings, while simultaneously reducing expenses.
Apart from that, if you decide to relocate from the suburbs into the city (for improved cultural and lifestyle activities), you may be able to eliminate the cost of owning one or both of your cars. You can use public transportation or Uber.
This can shave considerable recurring monthly expenses when compared to maintenance, repairs, and insurance resulting from ownership.
The core concept is “less is more”.
Less stuff means less hassle and less expense, which gives you more free time to savor your retirement life. Apply this principle throughout your life to create a combination of downsizing strategies.
2. Relocate or migrate to a lower cost state/country
While downsizing makes perfect sense, it is not for everyone.
Your next consideration is to relocate or migrate.
Many foreign countries offer exceptional cultural experiences and substantially lower cost of living. Such as Thailand or Malaysia via its MM2H program.
Google it and research factors such as cost of living, healthcare, culture, and more.
Another plus point for some of these Asian countries is that the climate is stable throughout the year. Saves a lot on winter clothing, and with good infrastructure supporting current expatriates community, coupled with affordable but world class healthcare.
The key principle is that relocating can get you a lot more home for the same money – or get you the same home for a lot less money. Because many people aren’t attached to a specific location, this can be a great solution.
3. Travelling and perhaps house-sitting!
If your heart is filled with a wanderlust vision of retirement, then you’re in luck. Full-time travel can be surprisingly affordable compared to home ownership.
One possibility is to consider selling your home and living in an RV. Unburdened by the labor and costs of home ownership, you’ll be free to travel as much as you like or stay put for months on end.
Getting rid of monthly payments, property taxes, home maintenance, yard care, and homeowners insurance can add up to huge savings.
Additionally, when you travel full-time, your home equity is freed to produce investment income. Your RV does double-duty as a home and mode of travel.
As long as you enjoy staying put instead of driving all the time, then gas costs aren’t a problem. You can play golf, fish, and catch up on reading instead. The savings can be dramatic.
Not only that, but many retirees find seasonal employment in national parks and campgrounds that provide additional income and social life. The rest of the year they’re free to follow the weather, visit the grand kids, or hop on a plane and see other parts of the world.
It’s easy to just put your RV in storage and not have to worry about home security or frozen pipes.
If you think full-time travel sounds expensive, you may be surprised at the savings involved.
4. Being & Staying Healthy means you don’t need to raid your Retirement Savings
Make no mistake – Healthcare costs represent one of the bigger risks to your retirement financial security.
That’s why having medical or healthcare insurance is vital. Otherwise, healthcare will eat up an increasing portion of your budget.
So even if you have medical insurance, it is prudent to stay fit and live a healthy, active lifestyle.
Why?
Because there are thing not covered by insurance, such as prescription medications.
Regular exercise and a low-stress lifestyle can mean fewer trips to the doctor, and fewer prescription medications.
If you already have an existing health problem, then consider the international solution again. Many countries have comparable or superior healthcare to the U.S. at a fraction of the price. Some even offer national health coverage depending on circumstances. Research your country of choice to get all the details.
5. Stretch it further – these things Add Up To Substantial Retirement Savings
Do you know that a thrifty shopper can easily save 1,000 a month on things like groceries, gifts, and recreation?
Sure, it takes a a bit extra time to spot the bargains, but as a retiree, you have a huge advantage – a flexible schedule.
Consider the below:
- You can take advantage of midweek savings on movie and theater tickets, and early bird discounts in restaurants.
- You can travel off-season for the double advantage of lower costs and fewer crowds. (visiting Venice in autumn)
- You stock up on X’mas gifts before December by picking up items throughout the year at sale prices
- You purchase wrapping paper and seasonal trinkets at the after-holiday sales when prices are usually less than half.
- You buy summer clothing when they are on sale as autumn approaches
- You buy in bulk non-perishable items on sale such as toilet paper
When you pick and choose from these and many other money saving strategies, you can easily figure out how to live happily on 1,000 less per month.
Reduce How Much You Need To Retire By 600,000… or more!
Are you serious in making a big dent in your retirement savings requirements?
It is not complicated. Just combine several of these cost saving strategies to double-down or triple-down your savings. They’ll dramatically reduce how much money you need for retirement.
Certain people find it hard to reduce spending by $1,000 per month because they’re very attached to where and how they live. The solution?
You can achieve the same reduction in savings needs by picking up the equivalent income from a part time or temporary job. The math is the same.
The key is to get creative and figure out ways to simplify your life so you spend less and reduce stress.
This will slash the amount you need to save so you can retire ASAP with higher financial certainty.
Read this if you are located outside of Malaysia and considering to retire in Malaysia.