How to Adjust to a Low Income in Retirement

The rule of thumb for retirement income is that technically, the retiree should still be bringing in around 75 percent of what they were while working. This reduced amount was expected to be enough to live on since they would no longer have certain expenses, such as the cost of gas, traveling to and from work, high vehicle maintenance, and the expense of buying work related clothing. It was also assumed that all the children would be out on their own, and household expenses would dwindle. Unfortunately, today there are other factors to take into consideration.

With the ever increasing inflation, and the fact that Social Security cost of living raises have been put on hold, many retirees that thought that their budgets would carry them through are finding it difficult to cope. Property taxes have increased, and food and gasoline prices doubled. Utility costs have gone up, as has the cost of supplemental health care. All of this, coupled with the fact that retirees are responsible for putting back enough each month to pay their taxes, has all taken its toll.

Retirees have found many ways to cut costs to offset their decrease in revenue, and one of the first is to downsize their home. Moving to a smaller, less expensive home, in a potentially lower property tax bracket, is one major change that many are making. Those that may have an extra car, RV, or other vehicle may also be downsizing in that area as well. If they can afford it, some will buy vehicles that get better gas mileage, but even so, they may very well be limiting their trips. The hard and cruel facts about retirement are that dinners out, and other recreational activities and entertainment may very well be a thing of the past.

Now, more than ever, retirees are finding it necessary to pay closer attention to everyday expenses, and are frequenting discount stores even more for food, prescriptions, and household items. Cable TV and internet costs are still considered luxury expenses for some, as are cellular phones. These may be eliminated, or at the very least, cut down to basics.

Today, for a great majority of the population, retirement is far from the promised Golden Years. With the economy and the high cost of living, it may very well be more like a reversion to those struggling years when couples were first starting out, and had to make every penny count.