5 Retirement Expenses You Shouldn’t Cut

Happy retired couple stand in their kitchen – iStock-1346862774

As you enter your retirement, you may start looking into expenses that you can cut out to save money, since you’re no longer working full-time. You’ll want to eliminate some expenses to help you free up space in your budget. However, certain cutbacks could hurt your quality of life or have a negative financial impact in the future.

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Here are five expenses that you shouldn’t cut in retirement.

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Healthcare Expenses

“Don’t cut back on healthcare expenses,” said ​​Carla Adams, founder and financial advisor at Ametrine Wealth. “While many health care expenses are easy to justify, other types seem more optional and even frivolous to those on a budget, like seeing the chiropractor, going to physical therapy or acupuncture, or even just putting off your annual physical, eye doctor’s appointment or semi-annual dentist appointment.”

You may want to make room in your budget by cutting out certain healthcare expenses, but this could hurt you financially in the future and lower your quality of life as a retiree.

Adams warned, “Not taking good care of yourself can lead to more problems down the road that may either cost you more money ultimately to fix or worse… get to a point where the damage cannot be reversed.”

As a retiree, you could face health issues you didn’t have to worry about when you were younger. You may want to try to ignore problems when they arise, or you may feel tempted to cut certain costs, like a gym membership, from your budget. The issue with these cutbacks is that you want your health to remain strong to get the most out of your retirement.

Adams concluded, “Your health needs to come first, or you will not be able to properly enjoy your hard-earned retirement. Throughout my career as an advisor, I’ve worked with some very wealthy people with chronic pain, and it’s truly tragic to see their suffering and to see that no amount of money can fully heal them. So, if there are things you can be doing now to keep you healthy and pain-free, don’t feel guilty about spending the extra money.”

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Housing Costs by Downsizing

“Choosing a smaller space or a less-than-desirable location can really bite you, if you’re not ready for it,” said Scott Lieberman, founder of Touchdown Money. “Remember, you’ll be spending much more time at home, so you’ll need to enjoy where you are.”

A common way for retirees to cut costs is to sell their homes and move into smaller units, tapping into some home equity for assistance with retirement income. While you can save money by downsizing to live in a smaller place or to move to a different destination, you don’t want to hurt the quality of your life by cutting back too much in this area.

Here are a few things to consider before downsizing:

• Are you ready for the smaller space?
• Do you have hobbies that will help you with your free time?
• Are you going to enjoy the new community that you’re moving to?
• Will your new place be too far for friends and family to visit?

Not every decision should be based solely on finances, since you still want to enjoy your lifestyle in your golden years. Moving into a smaller home or leaving the state could be the right decision for some, but there are no guarantees that you’ll be satisfied with this change.

Your Outdoor Space

“Cutting your outside space can also cause problems,” noted Lieberman. “You might enjoy some savings on landscaping and maintenance, but if you like spending time outdoors, the extra costs might be worth [it for] your enjoyment.”

As a retiree, you may eliminate an outdoor expense from your budget, like lawn care services or basic maintenance, to save some money. While you could save a few bucks, you may hurt your quality of life, if you’re no longer able enjoy spending time outdoors. You want to consider how you plan to spend your free time, since you no longer have a full-time job to take up most of your time.

Travel

“If you’ve waited a while to travel, you can miss out on some fun opportunities if you don’t make space for travel in your budget,” noted Lieberman.

You may put off travel and certain splurges as you try to save money, but you could miss out on creating memories. You want to leave some room in your budget for travel and vacation time so that you have something to look forward to.

Professional Financial Services

The final area in which you don’t want to cut costs as a retiree is spending funds on quality professional financial services. When planning for retirement and ensuring you have money to cover your expenses for the rest of your life, you’ll want to work with a trusted financial advisor.

A trusted financial advisor could help you plan as you transition to this next phase of your life. You don’t want to feel confused about your spending and how you will cover your expenses. You want to feel confident knowing you have access to helpful resources regarding your finances.

Closing Thoughts

As tempting as it may be to cut back on various expenses as a retiree, you don’t want to compromise the quality of your life by making too many changes at once. You may not want to cut out these five expenses immediately as you transition towards life as a retiree.

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