Phone bills, TV subscriptions, insurance premiums, house payments, and a variety of other expenses can make managing your finances during retirement incredibly stressful and challenging. An absence of ordinary income only exacerbates these issues, but with intelligent planning and decision making, anyone can significantly cut their retirement costs. We’ve created a list of payments many retirees make on a monthly basis that can be eliminated or reduced. Hopefully, you can use some of these ideas to enjoy your retirement with more disposable income and less worry about affording monthly payments.
A great place to start cutting down monthly expenses is your phone bill. Average monthly cell phone plans range from $50-60 and depending on your coverage, can be much higher. Additionally, people frequently pay for cell phone features they rarely use. Review your plan to see if you take advantage of everything it offers, and if you don’t, change to a more affordable one.
Fortunately, there are a variety of cell phone options tailored to individuals over 65. T-Mobile and AT&T offer options for people who do not use their cell phone everyday. These plans are only a few dollars a week, and you are only charged for days you actually use your phone.
If you do not have a smartphone or use any data, Republic Wireless provides unlimited talk and text for only $15 per month.
If you use all of your cell phones features (talk, text, data) Boost Mobile and Cricket Wireless offer great plans for only $30-$40 per month that include unlimited talk and text with at least 7GB of data as well.
To save even more money on your bills, consider removing your landline phones. Cell phones provide the same services, and home phones can cost hundreds of dollars annually.
More people are transitioning from cable subscriptions to streaming services today than ever before. With Netflix, Amazon Prime, Hulu, and others beginning to create their own shows and movies, consumers are increasingly preferring the low prices of online companies to the exorbitant rates charged by traditional cable providers.
It’s easy to see why. Streaming services average around $10 per month while low-tier cable packages start at $50-$60. At most large TV providers, premium cable subscriptions range from $80-120 and typically do not even include channels like HBO and Showtime which can be an additional $20-50. Streaming services also include substantial back catalogues of movies and TV shows and frequently provide discounts for HBO style content.
Even if you want to keep your cable subscription, investigate your current offerings. You might realize you could still watch all the channels you enjoy while downgrading to a cheaper package. An option to consider is Sling. They allow you to tailor your subscription and only pay for channels you actually watch. The best part is it only costs $25 a month.
Another great idea is to couple a basic cable subscription with a streaming service. This bundle is usually cheaper than most premium cable packages.
Life Insurance Premiums
Life insurance premiums are a burdensome expense that can increase as you age, and many people don’t realize they can sell their life insurance policies for cash- often for much more than the surrender value. Life insurance is a piece of property, much like your home, and you can sell it through a process known as a life settlement. In this transaction, the life insurance policyholder sells their policy to the buyer, known as a provider. The provider then continues to pay the premiums on the policy.
This benefits the policyholder in two ways. First, they receive money immediately that can help pay for home costs or any other expenses. Second, the policyholder no longer has to worry about premiums.
Surprisingly, many people allow their policies to lapse because they are unaware of this option. Annually, 250,000 policyholders lapse on their payments, missing out on an average of $51,300 each. Find out what your policy is worth here.
Downsizing to a Smaller Home
For most retirees, their biggest expense is their home. Mortgage costs, heating/cooling bills, property taxes, and general upkeep cost thousands of dollars annually. Many people also live in homes they raised families in, so houses often have unused rooms. Downsizing to a smaller house can be a good decision for retirees who can easily sell their home and are able to endure the moving process.
Relocating can also be beneficial to your health, as you can choose a new house that provides a better lifestyle as you age. Check out our previous blog post here to learn more.
If you decide moving is not the best choice for you, there are still options to earn extra money through your home. Consider renting out rooms to tenants and travellers.
If driving is no longer a safe option or you own an extra car that’s rarely used, consider selling it. You will no longer be required to pay for insurance, maintenance, or gas.
And remember, there are many ways to save a few dollars everyday. Eat out less and buy generic products if you don’t need the name brand. These savings can add up quickly. If you have any other ideas for cutting monthly payments, post them in the comments!