Retirement and “lower income” are words that strike fear into the hearts of many people who have not planned ahead throughout their adult working lives. With the realization, there is a certain amount of near panic that can set in, even for the strongest and most well-adjusted of retirement-age citizens. Without a doubt, many retirees will need to learn how to adjust to a lower income level.
Without prior planning, adjustments in this area are difficult. We find ourselves with rising costs in almost every sector, losses caused by falling interest rates, stock market losses, declining property values, and overall, fewer options for finding enjoyment and happiness in our retirement. Those who were fortunate enough to invest properly and save significant amounts of money over their years of employment are in a much better situation, generally, but still feel the pinch in a bad economy. They worry, too, but they do tend to have more options when it comes to living arrangements and leisure activities, travel, bequests, and so forth. However, lower income still affects many people either experiencing or facing retirement.
Some ways to adjust to the lower income level of a retiree (along with taking advantage of anything that says “Free!”) would include…
1. realizing you’re not in this situation alone. Millions of other retirees are facing the same problems and decisions about how to go forward without a feeling of deprivation. Feeling deprived can jeopardize any chance of enjoyment after many years of hard work and a comfortable lifestyle.
2. taking a good hard look at income and expense. Be honest. Keep track of how your money is spent and where it goes over a period of a few months. Write it all down so you can see at a glance where the bulk of your money goes. Look at where you can and should cut back on spending. If there are places where you can economize and conserve, by all means, work on that. Do you need cable, the highest speed Internet, and an SUV, or could you downsize to cheaper TV, lower-speed Internet service, and an economy auto? Could you do without the land line phone and use a cell phone instead? (Stick to the basics here.) Are there other ways to cut back on spending? Can you change insurance companies to one with lower rates? Can you raise deductibles for lower premiums? Can you find other ways of heating in winter to cut costs and still be comfortable and safe? If you have a mortgage, can you renegotiate your loan for a lower interest rate and lower monthly payments? Almost every area of expense can be lowered somehow or negotiated to suit your needs. Lenders are usually willing to work with customers to keep them, especially in light of the tight economy.
3. using store coupons and deals that net you at lease some savings over retail prices. Impulse buying is a thing of the past. Now you must make careful decisions about how and where to spend your money. Growing your own food in season and perhaps enough to can or freeze can be a rewarding and cost-reducing experience.
4. choosing insurance coverage that fits your needs, yet has premiums you can afford. If you’re covered through a group plan from your former employer or your spouse’s, stick with it. Group rates are lower than individual policies. Be careful of sales pitches – everyone is trying to sell you insurance and mortgages these days. Don’t be talked into anything over the phone. If deciding on health care insurance to accompany your Medicare plan, be prepared to study the different options offered by various insurance companies.
5. deciding how to manage free time. Maybe you don’t travel or do extravagant things. You still need to have some enjoyment out of life. If you like to dine out, consider that your form of entertainment and watch movies at home instead of the $12 per person at the movie theater. Visit the library, or invest in an e-reader for a huge selection of reading material. Do puzzles and other brain exercises to bolster mental acuity and save money on other activities. Take up swimming, biking, or kayaking on flat water near home to enjoy the outdoors and get adequate exercise, or simply take more walks and enjoy nature now. What you choose to do for fun doesn’t have to cost more than you can afford.
6. letting people know you are “downsizing” and begin cutting down on gifts to family, especially at Christmas, on birthdays, and other gift-giving events. If you need to give a gift, decide on an amount and buy a gift card. That way, you stay within your allotted amount for your gift and aren’t tempted to go over the limit. This is often most appreciated by recipients, anyway, as they can then decide on how best to use their gift.
7. counting your blessings. Although you may not be in the super-rich echelon of society, you have more than much of the world’s population on a day to day basis. If you have adequate food and clean water, shelter, clothing, and a reliable form of transportation—private or public—you are wealthy compared to so many other older adults. Realizing this and being grateful for it is one of the best ways to get past any disillusionment you may be feeling when you’re adjusting to a lower income level.
8. volunteering just for the sake of helping others. There’s no money involved here. Putting extra time to good use by helping another individual, a nursing facility, a hospital, or any other place where your assistance might be needed will put you in a good frame of mind and allow you to feel fulfilled instead of deprived. It’s not all about money, and volunteerism will help you understand that in a real and effective way.
9. getting a part-time job. Keeping busy with volunteer work will certainly help your psyche, but reality says that some additional income might not be such a bad idea. Very part-time, half-time, whatever works for you to help fill in the income gap can lead to feelings of accomplishment and satisfaction. It will eliminate some of the worry associated with a lower income level. Use the money you earn wisely, and put some away for a rainy day, even if you’ve never been able to save much before.
10. eliminating clutter. Have a huge yard sale or donate much of your material goods to charity. You can even give it away to family, or better yet, set it along the road with a “Free” sign. By getting rid of the items you no longer need or want, you open up space for a new way of life. It’s as psychological as it is practical, and it works. There’s a new perspective to be gained when you realize how much material wealth you’ve had, and how much of it you no longer really need. In the end, you’ll see that you also need fewer dollars and can do with a lot fewer items in your life.
There are many more ways to adjust to less income. Eventually, you’ll see that you really can adjust and don’t need unlimited funds. You can live well and enjoy life without all the trappings of financial abundance. A lower income during your retirement years is something to which you will adjust, and even adjust gracefully.