With retirement comes the freedom to make your own schedule. With more free time you can do whatever you please and enjoy everything that St. Petersburg has to offer. But unless you have a sizeable pension, retirement can also mean you need to be more careful with your finances.
Since one of the biggest monthly expenses for anyone is likely housing, there are some ways to think smart about your housing costs during retirement to make your dollars stretch further.
Pay off your mortgage
The average American spends 30 percent of their income on housing every year and if you are still paying off your mortgage during retirement you could be in that range or higher. One way to reduce your housing costs in retirement is to make a plan to pay off your mortgage before you stop working.
Consulting with a financial advisor well in advance of your retirement can help you set up a plan to cut back expenses to put more toward paying off your house. If paying off your house doesn’t seem possible, you can consult with a real estate agent to consider selling your house to move to a space that will cost less.
When you reach retirement, your lifestyle might change. You may end up spending less time at home or need less space in general without the need for a home office or rooms for the kids. If you plan on spending your retirement traveling, visiting your family, or enjoying the time in the great outdoors, you might find that you can move from a large home to a small home or an apartment.
Selling your home to downsize could mean you can buy a smaller property in cash, eliminating a mortgage payment every month. When you downsize, you may also cut down on other household expenses like maintaining your yard or having a housecleaner come by every month.
Move to an Over 55 Community
One way to downsize is by moving to a Florida retirement community where home maintenance and yard work might be included in your Homeowners Association fees. While you will still need to pay an additional monthly fee, if you are moving from a large home, this could cut down your costs significantly.
Communities that include gyms, golf courses, pools, and other amenities can reduce your recreation expenses, meaning savings every month. As part of your research into communities, be sure to make a list of your must-have amenities so you can assess the best community for your retirement needs.
Relocate to a less expensive area
During your working life, you may have needed to be close to your office, but in your retirement life, you might have more flexibility about where to live. If you can live anywhere, why not move to a less-expensive city along with downsizing?
Some options worth considering are being closer to family, or even relocating to a different state or country for a more relaxed lifestyle. Making a comparison of your regular expenses like groceries, gasoline, and energy bill can help you get a realistic picture of your cost savings, beyond the price of a new home.
Install energy-saving features
Whether you are reaching retirement or just planning for the future, one way to cut down on your expenses is by reducing your energy and water bill. These changes are not only good for your wallet, but they are also a positive choice for the environment.
Some simple changes are installing low-flow shower heads and faucet aerators to reduce your water bill, and improving your home’s insulation by sealing cracks in doors and windows with paintable caulking and insulating your attic. If you are planning to stay in your home long-term, solar panels are a major investment that can pay off by reducing your energy bill.
The dream of retirement may be to stop working, but the reality, to keep your finances in check, might be to take on a small part-time job to help you pay the bills. A part-time job doesn’t even have to be related to your “career job,” it could be that you decide to take up a new hobby and make it your job, such as by working in floristry, fixing bicycles, or teaching English as a Second Language.
Whatever it is, having a part-time job can be a way to maintain structure and connections outside of your home that can help you improve your mental health and your bank account balance. If you aren’t sure where to begin, starting with volunteering can be a way to discover a new interest that you may not have had time to explore while working. Volunteering can lead to a paid job, or be part of your new retirement lifestyle.
Consider intergenerational living and house shares
Loneliness can be an issue in retirement without the social interaction from going to work every day or being involved in your daily routine. That’s one reason why real estate agents are seeing an increased demand for Accessory Dwelling Units (ADUs) or in-law cottages as a home for retired parents of the main homeowner.
If living with your children isn’t an option, you might also consider renting out part of your house, either while you are there or when you are traveling. Having an extra person to share your living expenses can give you that extra boost of income every month. Another related idea is to be part of a housing swap while you are traveling to cut down on travel expenses and have someone to look after your home while you are away.
The carefree lifestyle doesn’t have to be a fantasy if you consider ways to set up your financial health before you retire — including taking some extra care with your housing expenses. The further you plan in advance, the better off you will be as you ease into your retirement life. Working with your financial planner and a St. Petersburg real estate agent can help you consider the best options for housing, for any retirement goals.