Article written by Alex Milzer - bio in Editorial Team
It may seem like you have your ducks in a row. The checklist you have been working on your entire life is nearing completion; the goals of purchasing a house, career milestones, and raising a family are checked off. Every month, for decades, you have diligently added to your IRA and investment accounts, accruing to a nice bankroll for life after work. Yes, everything is working out perfectly for retirement, as planned.
But wait, not so fast. Most retirees live on a fixed income every month and do not have abundant money for travel, entertainment, or whatever else their heart desires. Sure, the average retiree has accrued enough savings to live out the rest of their days without working, but not in excess. However, don't go dusting off your old work shoes; there are plenty of ways to make a little extra cash in retirement. One such strategy is downsizing your home, which we detail below.
It is amazing what we find under the stairs, in the garage, and that extra bedroom used more for storage than guests. Seniors have spent a lifetime acquiring an overabundance of unused possessions. Who needs two vacuums, eight barstools, and an old pinball machine you mistakenly thought your grandchildren would enjoy but never play. And sure, many items are family heirlooms holding real sentimental value, and it isn't easy to part ways with these precious items, nor should you. However, some of the items lying around your house have real monetary value and hold no personal attachment, so these are the items you should look to sell.
In the 21st Century, selling unused items is as easy as a click of a button. Craiglist, Facebook Marketplace, and Next Door are some of the online platforms we recommend. You can also host a garage sale. Invite your neighborhood cronies and make margaritas. A little booze should loosen their pocketbooks right up!
Now that you have cleared out space by selling off your unused items, you are probably wondering what to do with empty bedrooms in your home. One excellent option is getting a roommate, or perhaps you have a wing of the house or basement that could be rented? Either way, by adding a second person in the mix, you end up saving a bundle on your rent or mortgage. Airbnb is another option if you are a private person and prefer not to have someone sharing your space full time but rather once and while.
With modern technology, finding a roommate is made simple. Most retirees live on their phones, so check out these helpful roommate matching apps:
Of course, make sure you perform background checks on your rental candidates, both criminal and credit. Most of the top renting and roommate apps include built-in background checks, making it simple and easy. Having a roommate or renter is all about your comfort level. The reward is dollars back in your pocket, so you have extra spending money in retirement.
If you already live in a one or two-bedroom apartment or house, this section might not apply. Often, the home that you raised your family in is not conducive for retirement. As empty-nesters, do you really need all that space? Hmmm…
Additionally, saving on small monthly items, like the yard and utilities, adds up to significant savings by the end of the year, even thousands of dollars. By downsizing to a smaller home or apartment, you inevitably save money on water and utilities, putting money back in your pocket at the end of the day.
One of the most considerable costs associated with owning a house is the water bill. Zero scaping your yard would not only keep your water bill at a minimum, especially during summer months when spending is at its peak, but also is a good idea for seniors who are not avid gardeners and find law maintenance an inconvenience. You can also install energy-efficient, low-flow toilets with dual flush capability to not waste water every time you use the restroom. Below is a breakdown of an average water bill for a home with a yard.
|Lawn & Yard||50%|
Several additional clever methods to save money on your utility bill include:
The snow-capped Rocky Mountains or sunny beaches of South Florida? This is precisely the type of question you are so privileged to ask yourself in retirement. Many folks jump right into the decision, choosing the destination they covet the most without ever thinking about the financial implications.
One way to save money is by choosing the correct home x destination combination. For example, a two-bedroom apartment on the Upper East Side in Manhattan in 2021 is $3,618. On the contrary, a two-bedroom apartment is only $1,500 in Delray Beach, Florida (both stats according to Zumper). That's an astounding $2,118 in savings per month. Think of the new golf clubs or yoga products you could buy with that money.
Driving becomes more of a hassle as you age, and having friends, family, restaurants, grocery stores, doctors, parks close by are all things to consider. You can save a tremendous amount per year on car expenses by living close to all of your daily outings. You might even want to consider getting rid of your car altogether and use rideshares like Uber or Lyft to get around. According to mentalfloss.com, specific living scenarios are more cost-effective to get rid of your vehicle for rideshare.