The article in Money Magazine that featured my family was interesting to me for more than just the obvious reason. I had the chance to see what other folks are doing to cut expenses and make their retirement lifestyle fit their circumstances. Importantly, many of the examples given were steps I have taken, or written about.
One couple underwent a major downsizing of their home. From a 5,000 square foot house, they are now living in a one bedroom loft condo. I thought downsizing from 3300 sq. ft to 1750 sq ft was tough, but these folks did some serious pruning. Home association and maintenance fees are nowhere near what they used to pay in property taxes and upkeep. This steep reduction allows them to vacation in Europe and dine out often.
One topic I have yet to address in a post is the place of automobiles in the satisfying retirement lifestyle. One of the retirees in the magazine article has eliminated her car completely. She has found the $5,000 a year savings in insurance, gas, and maintenance is much more than what public transportation or simply walking where she needs to go costs. Living in a densely populated urban area with decent public transportation would probably be required for being car-less to be practical. I could never pull it off where I live in the suburbs of Phoenix. But, there is a certain attraction.
In a few cities a car-sharing option is available. Like a short term rental but much cheaper, autos are available for running errands or appointments. Then, they are dropped off at a certain location where the next person picks it up. And, of course, if you don't own a car but want to drive somewhere, there are plenty of companies that would love to rent you a car for that purpose.
We own two cars. One is used for less than 5,000 miles a year, while the other goes about 10,000 a year. I think we could make due with one car and save several thousand a year. But, for the time being Betty and I have enough separate appointments and schedules than one car would be a problem. When the 8 year old car dies, it probably won't be replaced. But, in the meantime two cars stay.
Paying off the mortgage and becoming debt free was the path to retirement happiness for at least one of the couples profiled in the article. While not everyone can do this prior to retirement, it should be a goal to accomplish as soon as you can. There will be some financial advisers who will tell you I'm wrong; you should use the mortgage deduction and invest the saved money. In some circumstances they are probably right. But, from personal experience I can tell you having no mortgage, no credit card debt, and no auto loans to worry about is a tremendously liberating feeling. You feel much more secure knowing there isn't a giant sword hanging over your head.
One couple has made it their business to maximize the power of discount coupons, 2 for 1 offers, and finding ways to cut travel expenses. This isn't the extreme couponing you may have read about. That involves getting food almost free by buying only items with coupons in situations where they can be tripled or trigger rebates or free products. It means stocking up when something is available in this way. While there is nothing wrong with this approach, the time commitment is beyond what I would be willing to make.
The couple's use of dining and other discount coupons is a way of life for us, too. Places like Groupon, Deal Chicken, and Living Social fill my inbox every morning with offers for every conceivable service and restaurant, all at least 50% lower than retail. Usually our dining out decision will be determined by which half off coupons we have available.
"I have less money than when I worked but I enjoy my life even more." That quote from one of the folks in the article seems to sum up the attitude of everyone interviewed. I couldn't agree more. Living well on less is doable and enjoyable. I urge you to take the steps that will allow you to find out for yourself.