Born between 1946 and 1964, many boomers have retired or are preparing to exit the workforce. While retirement should herald a new and exciting phase of life, financial concerns loom large for this demographic.
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These worries are not unfounded. The cost of living continues to soar annually, with everyday goods and services experiencing a 3.2% price hike from July 2022 to July 2023. Unless a rare period of deflation occurs, escalating costs seem inevitable in the years ahead.
So, what can boomers do to safeguard their financial future against this upward trend in prices? Here are some top frugal living tips to consider in 2024.
Start Working on That Retirement Plan
For boomers without a retirement plan, now is the time to create one. For those with existing plans, it may be worthwhile to review and make necessary adjustments to align with current and projected income, expenses, and retirement benefits.
According to Andy Cooper, a financial analyst at CouponBirds, “Boomers are those who are about to be or already have been eligible to receive retirement benefits. Therefore, it’s necessary for them to create their budget and strategy.” Cooper also advised that boomers track their spending within their budget, and maintain an emergency fund equating to at least six months’ worth of expenses, or more in anticipation of potential health concerns or other upcoming bills.
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Find an Additional Income Source
Whether already retired or contemplating retirement, supplementing income with a part-time job or side gig can help offset rising costs and manage everyday or unexpected expenses.
“Stick to making money,” advised Cooper. “40% of boomers agree they have not saved enough for retirement, making it crucial to keep earning and saving.” Various avenues exist to earn extra income, such as pet sitting on Rover or renting out a spare room on Airbnb.
“You can also apply for a reverse mortgage,” added Cooper. “The financial institution will pay you a certain amount of money on a monthly or yearly basis after evaluating your health condition and the value of your house.”
Delaying retirement by a few more years can also be a viable option for those in good health. While Social Security benefits can start at 62, the maximum benefit is only attainable at ages 66 or 67 for some individuals. Retiring before reaching full retirement age could lead to a 25-30% reduction in benefit amount.
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Downsize Your Home
Many people downsize in retirement for financial prudence and to alleviate the stress of maintaining a large home.
“Boomers should consider downsizing their homes,” recommended Carla Adams, founder and financial advisor at Ametrine Wealth. “Downsizing not only allows you to invest cash from moving to a lower cost home, but also saves on heat and electricity.” Adams added that downsizing in one’s 60s allows for more control over belongings, potentially unearthing valuable items to sell for extra income.
Use Those Senior Discounts
Exploit senior discounts at various establishments, including movie theaters, museums, gyms, restaurants, and retail stores, urged Adams. Also recommended was leveraging apps and coupons offering discounts, rebates, and other promos to reduce costs.
Take Advantage of Free or Affordable Options
Engage in or establish local community groups providing shared resources and services, recommended Aleksey Krylov, a certified financial analyst and managing director at FTERA Advisors. These initiatives not only foster a sense of belonging but also grant access to items and services without the burden of ownership.
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Save Money on Trips
Boomers can still indulge in occasional trips while minimizing costs. “For boomers, saving money by traveling is definitely a possibility,” said Krylov.
Efficient Financial Strategies for Retired Boomers in 2024
Retirees have always had to be mindful of their expenses. It’s like trying to plug all the holes in a leaky boat. Cost-saving measures include house-sitting, strategic traveling and savvy early-bird offers that can save a pretty penny. As the financial landscape continues to shift, new, responsible strategies continue to emerge. Think of it like rearranging deck chairs on a ship — every shift in position counts.
Find Savvy Ways To Cut Energy Costs
Energy bills can add up like water dripping from a leaky faucet. This pain is felt especially by those with expansive homes or in regions with extreme temperatures. For retirees on a mission to live frugally, even small energy-saving strategies can lead to substantial savings.
“Energy conservation may sound mundane, but it’s the small things that matter,” Cooper pointed out. “Research from CouponBirds suggests that a new energy-efficient air conditioner could lessen annual electricity usage by up to 449 kWh or $71.84.”
“Smart power strips used for laundry during off-peak hours can save you $22.12 to $41.7 annually,” Cooper recommends. “An energy-efficient dryer could reduce annual electricity usage by 70.2 kWh or $11.23.”
Cultivate Your Own Food
The cost of groceries and dining out has skyrocketed over the years. The price of groceries went up by 1.7% from November 2022 to November 2023, while dining out saw a 5.3% increase during the same period. For retires aiming to live more frugally, growing their own food may be the answer to cutting costs.
“Be a gardener,” Cooper advised. “By dedicating time and space, you can save money by cultivating your vegetables. For instance, a $1.50 pepper plant or packet of tomato seeds can yield anywhere from six to 100 times the produce compared to the same amount spent at the grocery store.”
Eliminate Unnecessary Memberships or Subscriptions
Monthly subscriptions to services such as streaming and food delivery can quickly eat into a retiree’s budget. In 2022, the average cost of monthly subscriptions per household was $219.
“Boomers, scrutinize your subscriptions and memberships,” Krylov suggested. “Beyond the usual suspects like streaming services and gym memberships, assess professional organizations, alumni groups, or club memberships.”
Cutting out a few subscriptions could easily save you $10, $20 or $50 – if not more. If unwilling to cancel some memberships, negotiate costs to release extra funds.
This article originally appeared on GOBankingRates.com: 9 Frugal Living Tips Boomers Should Focus On in 2024
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