It’s no secret that one of the biggest perks of retirement is having a flexible schedule – and more time for the things you love. In fact, over the next two decades, retirees are expected to spend a collective 2.5 trillion hours of leisure time1. So, how are retirees spending this newfound time? You may have guessed it – entertainment.
From taking in the latest movies on the big screen, to indulging in your inner foodie and sampling various cuisines, to jet setting on your next great adventure, or even trying your hand at a new skill or hobby – you may have some ideas on how you’d like to spend your retirement years. After all, they call these the golden years for a reason!
However, no matter what your vision of retirement fun entails – these activities will likely come at a cost. Data shows that people ages 65 and older spend $2,282 annually on entertainment, including fees and admissions to venues like museums, theater performances, and movies. These expenses also include hobbies and pet care, and amount to $191.16 monthly2.
In adjusting to a fixed-budget lifestyle, balancing these expenses and your lifestyle can prove challenging. Fortunately, there are ways to cut costs – not fun – in retirement.
Take Advantage of Senior Discounts
What’s the best part of getting older? Qualifying for senior discounts, of course! From travel, to restaurants, to shopping, and even the grocery store – there are plenty of discounts and benefits for retirees. Better yet, some of these discounts kick in as young as age 50 – so you can start racking up the savings early. And while not all participating retailers publicly advertise senior discounts and savings days, that doesn’t mean they don’t exist.
Next time you’re heading out to run some errands, do a quick search on potential savings opportunities for senior shoppers. And if you’re not sure if your favorite store offers such discounts, all you need to do is ask. With potential savings opportunities at stake, you’ll be glad you did! Check out our blog for 10 senior discounts you may be missing out on.
Account for Travel Plans
Traveling in retirement opens a world of possibilities – literally! In fact, it’s also been linked to a healthier aging process. And without a stringent work or school schedule to plan around, you’ll be able to use your newfound free time to travel whenever you want – including off-peak times. Not only do these periods typically have less crowds, but they also tend to come at lower prices.
If you plan on jet setting in your retirement years, you’ll want to factor these trips into your budget. And fortunately, with a little bit of planning – traveling doesn’t have to break the bank. Check out our blog for 7 travel tips for seniors.
Downsize Your Home
If you plan on spending more time traveling the world throughout your golden years, the large house you’ve called home these years may not be best suited for your lifestyle. As an empty nester, you may find yourself with extra rooms or a large backyard that is seldom used. Downsizing into a smaller home boasts several benefits for retirees. A smaller home not only reduces your housing payment, but can also lower your utility and home maintenance costs exponentially. Just imagine what you could do (and the places you could go!) with that extra money each month.
Reduce Your Cost of Living
When it comes to living on a fixed income, maximizing your money is key. But where you live can also potentially affect just how far your money can go – and how much you can allocate to leisure and entertainment. The cost of living varies state by state and relocating to a less expensive area can help you save money on food, taxes, and other services. What’s more, certain states are known for being retiree-friendly and offer low or no sales or income taxes at all.
If you’re considering downsizing or relocating in retirement, tapping into your home equity with a reverse mortgage may help simplify and expedite the process. Also called a “HECM for Purchase,” this type of loan allows you to purchase a new home while securing a reverse mortgage – all in one single transaction.
Turn Your Hobbies into your ‘Second Act’
With retirees increasingly opting to supplement their income with a part time job or ‘second act,’ you may find yourself wanting to generate some additional income. And what better way to do so than by turning your hobbies into a part-time gig?
Are you a history buff? Consider taking on a part time job as a tour guide at a nearby museum. Love to golf? Check out the pro shop for part-time job openings or opportunities to give lessons to others. Aspiring artist? Showcase and sell your creations and masterpieces online. The possibilities are endless. It’s all about loving what you do – and making some money in the process!
While nobody likes to have debt, the reality is that many Americans do – and an increasing number of seniors are entering retirement carrying more debt than ever before. According to a 2019 Congressional Research Service report, 61% of households led by people ages 65 and older were carrying debt in 2016 – up from just 38% om 1989. What’s more, the amount of debt also skyrocketed – with the average owed jumping from $7,500 in 1989 to upwards of $31,000 in 20163.
If you’ve entered or are nearing retirement with debt, you are not alone. But gaining control of this debt can set you on the path to a better retirement. Prioritizing debt repayment is the best way to free up more of your retirement budget for the long-term. Start by paying off the debts with the highest interest, such as credit cards. From there, shift your focus to fixed rates and payments such as that of a mortgage or car loan.
And if you’re age 62 or older and could use some help paying off these debts, tapping into your home equity with a reverse mortgage could be a viable solution. If you have an existing mortgage on your home, the funds from the reverse mortgage4 are first used to pay off that loan. And since there are no required monthly mortgage payments on the reverse mortgage5, you can eliminate that monthly expense and free up more cash to use as you see fit – such as paying off any other remaining debts.
While your working years were a time for saving and building up your retirement fund, the golden years are here – and you may find yourself ready and wanting to spend. With more time for the things we love comes more expenses – and factoring the fun into your budget can give you the confidence to live the retirement lifestyle you’ve dreamed of for all these years.
And if you could use another source of cash flow to supplement retirement income, look no further than your home. With today’s homeowners ages 62 and older accounting for upwards of $10.1 trillion in home equity6, you may be surprised to see how much wealth is in your home. And tapping into this equity with a reverse mortgage could provide you the financial means to help you live out the retirement of your dreams.