Money might make the world go round, but the old adage is true: cash doesn’t buy happiness. If you’re approaching retirement with concerns about the level of funds you will have available in your pension pot, you could consider another approach – reducing your outgoings.
Many people, when they see their expected income on a pension statement, are shocked. They immediately start to compare this figure with their current income. However you should consider the sort of retirement you plan on having before starting to panic unnecessarily.
Lots of people are now considering different ways to save for their retirement, such as investing in property or ISAs. If you are looking for a way to sell your pension to release the cash tied up in it, either to invest elsewhere of for more pressing financial concerns, speak to a pensions expert.
Asses Your Outgoings
When you reach retirement your income may seem somewhat depleted, but your outgoings will have probably also dwindled. Most 65-year-olds, for example, will be living mortgage-free in their own homes which saves a good chunk of cash every month.
Additionally, without the daily commute to the office, a retiree saves on petrol and car maintenance costs. You may decide that as a family you now only require one car, or you could rely on free public transport with your senior citizen’s bus pass.
You will also probably be an empty nester, with all the children flown from the coup, which saves on grocery shopping, laundry and bills.
How To Make Savings
If your family home is feeling a little empty with the family off living their own lives, consider downsizing. Selling your biggest asset in favour of a smaller, more suitable house for your circumstances could leave you with a hefty lump sum from the sale, which you can re-invest, use to supplement your income, or just enjoy yourself with. Smaller homes are also much more cost effective to run, as you are not pointlessly lighting and heating empty space so you’ll make further savings here.
Choose Frugal Hobbies
Unless you’re into yachting around the world, keeping yourself occupied during your retirement need not be expensive. Gardening or cultivating an allotment could even help you save cash by growing your own vegetables for the table, while others enjoy reading a good book, getting involved in community events and volunteering for charity work to stay physically and mentally agile.
You might even consider topping up your pension in early retirement by continuing to work part time. This is a great way to maintain a social life and a feeling of purpose throughout your golden years. Whatever you choose to do, it is possible to enjoy your retirement without spending beyond your means.