Ways To Save Money Post Pension

Retirement PlanningIt’s the great Canadian dream: stop working young to spend life’s later years puttering around a Florida condo, chilling with the grandkids and zipping off for the occasional cruise.

For some Canadians who worked hard, saved well and have a great pension, that dream is very much a reality.

But a retirement full of good times is not a guarantee, particularly on the financial side. (We won’t say much about health here — it goes without saying!)

According to the National Seniors Council, the median income for senior couples in Canada was $41,400 in 2006, and $20,800 for singles. That’s not a lot of money!

Of course, some have a lot more – but many have less. How can you make your conservative and very much fixed income go as far as possible in your senior years? Here are some ideas:

Downsize… And Do It Right

It’s amazing how many retirees are still living in their large family homes. In Canada, many of us live in houses that are so spacious we don’t even use all the rooms. It may be difficult to let the family home go, but there are huge up-front savings from moving to a small home. As well, a smaller home or a condo requires a lot less maintenance – both time and money. If you have a large extended family, the investing in pullout couches and inflatable beds is nothing compared to what you can save by living small.

That said, you need to make your move wisely. Real estate agent and lawyer fees, plus land transfer taxes can sap some of the windfall of selling your home. Make sure the downsized location is going to suit you for a long time, even if there are health concerns. It’s hard to think about this, but if you’re a couple, make sure the downsized home is appropriate for one person too.

Think Small Beyond The Home

Scrimping will pay off. Consider getting rid of your second car, trimming back your cable channels and getting Netflix instead, and cancel that gym membership if you don’t use it. And when you are purchasing items, make sure you can afford it: maybe your next car doesn’t need to be a luxury sedan, and you can get a new TV when it’s on sale.

Write Up A Plan

Less than a quarter of Canadians have a written retirement income plan. Work with your bank or financial advisor to work out how much money you’ll need for the rest of your lifetime and budget accordingly.

Find Ways To Save On Travel

It’s said that half the enjoyment of a trip comes in the planning. So do the savings! Booking well in advance for flights in particular means getting the best deal. Sign up for e-alerts from the big airlines and hotel chains you frequent. Get onto their frequent traveller bonus programs. Planning early gives you more time to seek out deals for rental cars, accommodation, special packages and other perks.

Avoid Competition

“Keeping up with the Joneses” applies to people of all ages. If your retired pals are lavishing high-end gifts on their grandkids and staying in four-star resorts when they travel, it’s tempting to splurge along with them. Keep your budget in mind at all times and avoid living a higher life than you can truly afford.

Watch Those Loans

While your mortgage years may be behind you, the banks are still keen to lend you money, often via lines of credit. These wonderful loans let you take out up to a certain amount of money (such as $20,000) but there are no true incentives to pay them off. Therefore you can be left holding a balance for years and not pay down the loan with your fixed income. Take out lines of credit only if you can force yourself to pay them off.

Question Your Insurance Needs

Talk to someone you trust before you take out travel, life, mortgage or appliance insurance. Many of these programs are not needed, and many will try to sell you more coverage than you truly need. Do your homework, never give in to pressure tactics and only buy after you’re really sure the product at hand truly suits you.

While the retirement years should be the time when you reap your reward for a lifetime of hard work, it’s still amazing that in these years — like your younger ones — poor financial planning can nab you of your resources lightening fast. Plan well so you can truly kick back and enjoy yourself.

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One thought on “Ways To Save Money Post Pension

  1. We paid it to the insurance cpmnaoy.Our insurance and escrow have nothing to do with each other.Next year, when the policy is due, I will have to pay it, just like I did the first year.

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