The retirement years often lead to a new lifestyle. “Retirement offers that time and flexibility to find meaning in ways you might not have thought of before,” says Scot Landborg, a partner and senior wealth advisor at Sterling Wealth Partners, based in Orange County, California. You’ll likely discover a long list of options to fill your post-work days.
Whether it’s touring new museums, meeting friends at restaurants for dinner or exploring nature reserves, the activities you pursue can quickly eat into your retirement income. Taking a careful look at what’s important to you, as well as the funds available, can help you map out a meaningful retirement without overspending. Here’s how to create retirement experiences on a budget:
Think Through What’s Valuable
Set aside some time to make a list of how you want to spend your days. Consider what’s important to you, as well as any activities you’ve dreamed of carrying out in retirement, such as hiking along mountain trails, taking cooking classes or touring Europe. You might also include tutoring students, mentoring others in your career field, watching grandchildren play sports or volunteering at an animal shelter. “Lay out what you believe will be the most enjoyable retirement for you,” says Drew Parker, creator of The Complete Retirement Planner.
Assign Costs to the Activities
Once you have a vision of what a meaningful retirement will look like for you, research prices. “Start assigning realistic costs to those activities and that lifestyle,” Parker says. If you want to move to live near your children, research the housing costs and overall living expenses in that location, such as food, gas and utilities. For projects you want to carry out, look at the prices of the materials as well as any professional services or help you will need.
Know How Much You Have
You might receive income in retirement from Social Security, pensions, retirement accounts or side jobs. Think through the different streams of funds, and make sure your budget includes them. If it’s difficult to calculate the cash coming in, sit down with a financial advisor to set up a system to track those funds.
Modify Your Plan as Needed
Once you have a list of the estimated costs of your desired activities and an idea of your ongoing income, take some time to compare the two. You might find you can pursue all the experiences that are valuable to you and not overspend. If the costs are higher than what you have coming in, consider setting priorities. “Plans may need to be adjusted to fit your ability to fund them, but knowing what is possible will allow you to choose the activities that are most important to you and that provide the most rewarding experience while still staying within budget,” Parker says.
Think of Ways to Reduce Expenses
If the experiences you want to pursue don’t fall within your budget, consider ways to carry them out at a lower cost. Traveling is often one area where overall expenses can be reduced with a little creativity. When Julie and Sean Chickery, a semi-retired couple and founders of Chickery’s Travels, considered ways to visit different areas in retirement, they decided to live and travel full time in a recreational vehicle. “When we were living in a traditional home, we would have to pay for hotels or home rentals at each destination, which could lead to overspending,” Julie says. “By living in our RV, we’ve consolidated living and travel expenses.” The couple can now stay in each location longer without having to worry about hotel costs or long home rental stays. “This gives us time to have more meaningful encounters in the local community and revisit sights we’ve truly enjoyed,” Julie says.
Another way to fulfill travel dreams at a lower cost is to visit during off-peak times. Prices tend to drop during the low season in some areas, and you might be able purchase airline tickets and book hotel stays for a reduced price. Apps like Hopper, Kiwi and Skyscanner can help you watch for travel deals.
Consider a Cheaper Location
A move to a less expensive city reduces your housing costs and other essential expenses, which allows you to spend more on activities and experiences. After retiring and moving to Granada, Spain, Jim and Jiab Wasserman, the founders of Your Third Life, created a lifestyle that costs $30,000 a year. They left a 2,700-square-foot home in the U.S. and now live in an 850-square-foot apartment. For the transition, they took less than a third of their clothing and other items.
The reduction in possessions and space turned out to be a liberating experience. “Spanish living is based on small places that are for sleeping and minimum activity, with the expectation that one will spend most of one’s time outdoors and interacting within the community,” Jim says. “We take hikes, walk about town, take in cultural events and are always seeing, greeting and interacting with our neighbors.”
[Read: 25 Things to Do When You Retire.]
Use Technology to Find New Experiences
During retirement, the activities that bring meaning might change over time. You may find that you enjoy volunteering at a 911 call center for a number of years, and then want to pursue a different opportunity to help others. If you’re looking for new ways to find valuable experiences, the internet can help you find many options. “Work for Uber on Friday nights just for fun, or be a dog walker with wagwalking.com,” Landborg says. If you enjoy sewing, sites such as All People Quilt offer information on ways to make items for charities.
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