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5 Ways to Live Generously on a Fixed Income

Our thanks to Karen Weeks for this contribution to our blog. 

Seniors living on fixed incomes face many challenges to a comfortable retirement. However, none of those challenges are insurmountable, and they won’t make your golden years any less fun, relaxing, or exciting. It’s all in how you approach your finances to squeeze the most out of every dollar. Do you need to do a little financial tweaking in order to make the most of your fixed income? Here are a few simple ideas that could have a substantial impact.

Reassess Your Healthcare Plan

Are you spending too much on healthcare? It’s possible, even with Medicare. Rates are different for different reasons: your current health conditions, where you live, how old you are, and how much money you made while working. There are also different rates for different plans, so shop around. You might be able to save money over the long run with a Medicare Advantage Plan. With an Advantage plan, you get the traditional Medicare Parts A and B coverage, along with coverage for preventive services, medications, vision, hearing, dental, and fitness programs.

Stretch Recurring Expenses

Do you subscribe to cable TV? Do you go out to eat a lot? Own both a home phone and a mobile phone? These are just a few examples of recurring payments that we often stop thinking about. When you’re on a fixed income, you can increase your spending money by stretching some of these. You can cancel cable, limit dining out, or eliminate your home phone. Get the Sunday paper instead of the daily paper. You don’t have to reduce everything, but just enough to shift money around for something more important, like visiting family and traveling.

Pick Up Some Part-Time Work

Just because you’re retired doesn’t mean you can’t pick up some work on the side. Although Social Security does pose a limit on earned income, you can still pick up a few hours here and there if you’re so inclined. Fortunately, you no longer need to leave the house to find a job, and many freelance opportunities can be fulfilled remotely at your own pace — as long as you satisfy your client, of course! For example, if you’ve always had a way with words and want to try your hand at writing professionally, you can use online job boards such as Upwork, where you can ply your trade with other copywriters and ghostwriters for hire. Alternatively, look for a local shop you love where you can work a few hours a day. This gives you an opportunity to not only bring in some extra income, but it also provides you with a chance to interact with other people on a regular basis.

Travel with a Friend

Your golden years are a prime travel opportunity. With your days no longer filled by the traditional nine-to-five grind, you can take a vacation any time you want. Save money so you can experience more by traveling with a friend. A travel buddy helps you split the cost of food and lodging, as well as gas, rental cars, and excursions. If your friend is also a senior, you both can take advantage of serious discounts through AARP or other tourist-based enterprises. For example, seniors on a fixed budget can get an annual pass to all US National Parks for only $20. Since traveling companions can also enter for free, this pass is a great way to explore some of our nation’s most majestic treasures on a tight budget.

Refinance or Downsize Your Home

Refinancing your home can help reduce your mortgage payments each month. This is especially suitable for seniors who have a lot of equity in their home and plan to keep living there for a while. A home refinance can replace your current loan with a new one with improved terms.

You love your family home, but some seniors stick around for sentimental reasons. For many seniors, downsizing can be incredibly effective. They don’t need that much space, and so a great alternative is to sell your home and buy something smaller, less expensive and more manageable. For some seniors, downsizing can add tens or even hundreds of thousands of dollars to your retirement cushion.

Living on a fixed income may require some critical thinking from time to time, but with some creative budgeting, you won’t have to worry about penny-pinching. Managing your expectations can help a lot, too. If you’re hoping to languish in the lap of luxury, a fixed income will be disappointing. But if you can expect to find joy in simplicity, you’ll find joy in a fixed income, too.