12 Simple Ways to Save Money — Even on Health Care — in Retirement
Retirement is when you get to finally enjoy the freedom you’ve worked hard for all your life. But with that freedom also comes the reality of living on a fixed income and making sure your nest egg can last the rest of your life. According to a new survey from Allianz Life, 64% of Americans are more worried about running out of money in retirement than they are about dying. That said, there are many ways you can cut back on expenses and enjoy a frugal retirement.
How to Plan for a Frugal Retirement
Here are 12 simple strategies to help you stretch your retirement savings as much as possible.
1. Review Your Health Insurance Regularly
Medicare, supplemental coverage and private plans can change every year and could have implications for your access to providers and costs. In other words, the plan that fit your needs a year ago may now be costing you far more than necessary.
That’s why you’ll always want to review your coverage every open enrollment season. During the nearly eight-week annual open enrollment period, Medicare beneficiaries are allowed to make changes to how they receive their Medicare coverage. So take that time to compare your options side by side and make adjustments as necessary.
If you need help reviewing your health insurance plans and making a decision, free counseling programs like the State Health Insurance Assistance Program can help you make the most cost-effective choice.
2. Switch to Generics and Compare Prescription Prices
Prescription drugs are expensive, but you don’t always have to pay sticker price. According to the U.S. Food and Drug Administration (FDA), generic medicine works in the same way and provides the same clinical benefit as the brand-name medicine. In other words, you can take a generic medicine as an equal substitute for its brand-name counterpart. If your doctor automatically prescribes the brand-name version, don’t be shy about asking whether a generic is available.
On top of that, pharmacies often charge different prices for the exact same drug. For example, the pharmacy near your house might list your refill at $120, whereas another location across town may only charge you $45. So make sure to compare prices at a couple different pharmacies to make sure you’re getting the best deal.
Make Money to Help Fund Your Retirement
Frugal retirement living becomes a lot less stressful when you have a little extra cash on hand. To help you get the quick cash you need, we rounded up some of our favorite ways to make easy money below (and they don’t take up a lot of your time or require special skills).
| Offer | What You Can Earn | What You Have to Do | Take Action |
|---|---|---|---|
| InboxDollars | $225/month | Complete short surveys | |
| FreeCash | $1,000/month | Simple online tasks | |
| GoBranded | Up to $140/month | Share your honest opinion | |
| Kashkick | $1,000/month | Try out apps | |
| Solitaire Cash | Up to $83 per win | Compete against other players | |
| Bingo Cash | Up to $83 per win | Compete against other players |
3. Downsize Your Living Space
Housing is usually the largest line item in any retirement budget. According to Fidelity’s Consumer Expenditure Survey data, the average U.S. retiree ages 65 to 74 spends $22,216 per year on housing, which is around $1,851 per month. If you’re living in the same house you raised your kids in, it might feel comfortable and convenient to just stay there. But maintaining a large property often comes with costs that don’t make sense anymore, especially if you live alone.
By downsizing, you’ll spend less on heating and cooling, and you might even pocket a profit from selling your current home. Downsizing doesn’t always mean moving to a smaller home. It can also mean relocating to a more affordable city where the cost of living is lower.
4. Take Advantage of Senior Discounts
One of the easiest ways to cut expenses in retirement is by taking advantage of senior discounts. Many restaurants, movie theaters, grocery stores, hotels and utility companies have special pricing that cater to older adults.
Here are a couple you should know about:
- Anyone 62 and older is eligible to save at least 10% on a Marriott hotel stay.
- IHOP offers a 55+ Menu, with discounted prices for customers who are 55 years or older.
- DoorDash offers AARP members 25% off their first order of $15 or more.
- Those 55 and up who are enrolled in the MyWalgreens rewards program can receive up to 20% off their purchase.
- If you’re 55+, you can sign up for one of T-Mobile’s discounted senior plans, which gives users two unlimited lines starting at $30 a month each.
- Amtrak offers a 10% off discount on most rail fares for passengers 65 and older.
5. Consider Telehealth and Virtual Visits
Telehealth has exploded in recent years, and it’s now one of the easiest ways to save money on routine care. Many insurance plans cover virtual visits for common issues like minor infections, prescription refills or follow-ups. Instead of paying a $40 office copay, you might pay $15, or sometimes nothing at all.
Plus, with virtual doctor visits, you don’t have to drive, spend money on gas or pay for parking. If you live in a rural area or don’t have a car, telehealth can make health care far more accessible and convenient.
6. Look for Community Health Resources
You don’t always need to rely on expensive private care. Many communities offer free or low-cost services geared toward older adults. Local clinics sometimes hold free screening days for things like blood pressure or cholesterol. Dental schools often provide cleanings and checkups at reduced prices, because students are practicing under supervision.
Some senior centers and nonprofit organizations also host wellness classes, nutrition workshops or exercise programs that cost little or nothing to join. These resources not only save money but also give you access to a support system of peers who are navigating retirement alongside you.
7. Cut Down Everyday Expenses
If you don’t have the habit of budgeting, build one now. Start by looking at your bank statements and seeing which areas you’re spending an unnecessary amount of money on. For example, if you’re paying $17.99 for Netflix but you barely watch movies anymore, cancel the subscription and redirect that money toward your savings. If a budgeting app would help you get organized, a couple of our favorites are Cleo and Quicken Simplifi.
A simple rule to follow for a frugal retirement is the 4% rule. It means you can safely withdraw about 4% of your portfolio each year in retirement without running out of money. Using that number as a guide will make it much easier to set spending limits and know what you can afford. Meet with a financial planner or advisor if you need help crunching those numbers.
8. Be Strategic About Elective Procedures
Not every medical procedure has to happen right away. If something is considered elective, like cataract surgery or a total hip replacement, you usually have the flexibility to decide when and where it’s done. That gives you a chance to plan ahead instead of getting hit with a huge bill all at once.
Where you have the procedure done also matters. Outpatient centers are often much cheaper than hospitals for the exact same service, and the quality of care is usually just as good. If you’re open to it, traveling abroad for certain procedures at accredited hospitals can also be a good idea because they typically charge a fraction of U.S. prices.
9. Travel with Discounts and Off-Peak Deals
You’re no longer tied to school calendars or vacation days once you retire, which means you can travel off-season when prices drop. Flights and hotels are often dramatically cheaper mid-week or in shoulder seasons, like spring and fall. Many airlines, cruise lines and travel companies also offer senior discounts, though they may not advertise them openly.
If you’re a member of the AARP, you can unlock even more savings on hotels, rental cars, vacation packages and cruises.
10. Pick Up Flexible Part-Time Work
If you don’t mind working a few hours a week, getting a part-time job is a great way to stay active, engage with the community and earn extra money. That extra income can go directly toward discretionary spending, like travel and hobbies, without dipping into your main retirement funds. Plus, many employers value the reliability and experience older workers bring, so you may have more options than you think.
If you need help finding a part-time job, the AARP has plenty of resources available on its website to help you with your job search, including free virtual job seminars, resume guides and a job board.
11. Meal Prep
Food costs never go away, and they can easily eat up a chunk of your retirement budget if you’re not careful. One of the best ways to save is by cooking more meals at home. It usually costs less than dining out, and you get to control the ingredients, which often makes it healthier too.
If you don’t have the energy to cook every single meal, set aside some time once or twice a week to cook larger portions of your favorite dishes. Freeze the extras in individual servings, and you’ll have ready-to-go meals for those days when you don’t feel like cooking. You can also save money by buying certain items in bulk, especially staples like rice, beans or pasta.
12. Take Care of Your Health
At the end of the day, the best way to save money on health care for a frugal retirement is to stay as healthy as possible. That means making time for walks, preparing nutritious meals at home and surrounding yourself with a strong social network. The healthier you are, the less you’d spend managing preventable conditions, and the more money you’ll have to enjoy the retirement you worked so hard for.
