Reducing Expenses Can Powerfully Impact Retirement Plans
Virginia Beach, VA (Law Firm Newswire) January 16, 2015 – It is often necessary for individuals to cut down on their expenses once they retire. Planning to reduce or cut out certain expenses can be an important part of a retirement plan, improving a person’s financial security without requiring them to cut out vital resources.
“Many times, expenses that were reasonable while one was working do not make sense after retirement,” said Andrew H. Hook, a Virginia estate planning attorney with Hook Law Center, which has offices in Virginia Beach and northern Suffolk.
Many people can save on transportation and car costs. Couples with two cars may find that one car works just fine after retirement, allowing them to save on insurance, upkeep and auto payments. In addition, people with luxury cars may consider downgrading to a more basic model.
Certain types of insurance can become an unnecessary drain on a retired person’s resources. Many older individuals no longer need or benefit from life insurance or disability insurance, which become more expensive as a person ages. People with substantial savings may also consider changing their car and homeowners insurance to have lower premiums and higher deductibles.
Some retired people continue to assist their adult children with living expenses. Although doing so is common, retired people should avoid supporting their adult children unless they have the financial stability to do so without sacrificing a comfortable retirement. As an alternative, parents may need to practice saying “no” or consider helping in alternative ways, such as letting an adult child live at home.
Since the kids have typically moved out, many retired people no longer need a large home in a good school district. The upkeep and property taxes for such a home can be a financial strain, and some houses may become difficult to navigate physically. Retired persons may benefit from downsizing to a smaller home that will have less maintenance.