By Rodney Brooks

Reduce the cost of retirement.

Retirees with a low cost of living can get by with less savings. If you are willing to reduce your retirement expenses you might be able to retire sooner and live well on a modest retirement income. Try these strategies to cut your retirement costs without sacrificing your quality of life.


Moving into a less expensive home can significantly reduce your retirement expenses. You can go from four bedrooms to two, or move to an area with a lower cost of living and lower taxes. Some retirees move to North Carolina, Arizona and other places where the cost of living is more affordable and property taxes cost less.

“Downsizing can have a tremendous impact on cost savings during retirement,” says Eric Bailey, founder and CEO of Bailey Wealth Advisors in Silver Spring, Maryland. Utility bills are generally lower in homes that are smaller and in better climates where you don’t have to spend a lot of money to keep your home heated.

Sell a vehicle.

Your household may no longer need two vehicles once you don’t need to commute to work. “You probably won’t be driving as much. Is the vehicle you have the most effective way to get around? Do you still need two cars?” Bailey says. Getting rid of one vehicle can reduce your costs for gas, maintenance and auto insurance. In a community with good public transportation options you may even be able to get by without a car.

Be more energy-efficient.

You may be able to reduce your retirement expenses and help the environment at the same time. Installing solar panels, automatic lights and smart thermostats could help minimize your energy costs throughout retirement. If you are planning to move in retirement, “One way to cut costs immediately when you downsize is to look for an eco-friendly or green home,” says Jordan Sowhangar, a wealth advisor at Girard in Souderton, Pennsylvania.

You can also look for more energy-efficient appliances, including your refrigerator, washer and dryer. “By and large, you can cut utility costs by 20% with new higher-efficiency products,” Bailey says.

Shop for lower-cost services.

Many people stick with the same service provider for years because it’s too much of a hassle to quit. Looking for a better value could save you hundreds or thousands of dollars annually. Look for less expensive options for cable, telephone and internet services. Consider whether your Medicare prescription drug plan or Medicare supplement plan is the best priced for your situation. Think about refinancing your mortgage, finding more affordable auto insurance and shopping around for lower bank account or investment company fees.

Use senior discounts.

If you’re willing to admit your age, you may qualify for a senior discount on many of your purchases. “Don’t shy away from saying your age,” Sowhangar says. “Senior citizen discounts are everywhere – restaurants, travel places, clothing stores, hotels and movie theaters. My mom shops at a certain grocery story because there is a senior citizen discount. Brag about your age.” Some senior discounts are not widely publicized and may only be available to those who ask.

Reevaluate your insurance policies.

Once your children have grown up and your house is paid off, think about whether you still need to pay for life insurance. “Maybe it makes sense to stop paying premiums, maybe lower the death policy and save on the premiums,” Sowhangar says. It’s also a good practice to review your auto and homeowners insurance for senior discounts once you are driving less and are home more often. “Certain carriers have a discount,” Sowhangar says.

Get help if you need it.

Financial planners and insurance consultants can help you reduce costs. An expert might be able to help you reduce your retirement tax bill, find a lower cost insurance policy and find other ways to reduce your monthly bills. “Many people get stuck, embarrassed because they don’t know, and they think they should,” says Patrick Murphy, CEO of retirement plan services for John Hancock. “Use experts who can help you. Don’t be afraid to ask for help.”

Pay off your mortgage.

Housing is among the biggest costs retirees face. Eliminating your mortgage removes a sizable monthly bill from your retirement expenses. You will still need to pay taxes and maintenance costs for your home, but that is likely to cost significantly less than your mortgage payment.

These are ways to cut costs in retirement:

  • Downsize.
  • Sell a vehicle.
  • Be more energy-efficient.
  • Shop for lower cost services.
  • Use senior discounts.
  • Reevaluate your insurance policies.
  • Get help if you need it.
  • Pay off your mortgage.