Most seniors look forward to a good life in retirement.  However there are now two key changes that mean that this only comes through careful financial planning for your retirement. 

• Seniors are living longer
• The major recession has depleted the funds they may have accumulated to cover their retirement.

In other words, you may have to trim your spending to make your savings last.  Just consider one of the examples quoted in the Star news item:

When Janet and Bob retired at age 55, they were earning a joint income of $400,000. Both were senior executives in the corporate world.  Now in their late 60s, they live more frugally. No longer do they own a cottage up north, buy new cars, eat in restaurants or rent condos in Florida with friends.  They live on a budget of $60,000 to $70,000 a year, which doesn’t include debt, to make their savings last.

Statistics Canada published a report in 2005, which detailed the spending patterns of older people:

• Households age 75+ spent 73 cents of each income dollar on personal consumption.
• Food, shelter and transportation made up the lion’s share (61 to 68 cents) of each consumption dollar.
• Households pay more for government and private health insurance plans than 20 years ago.  There are higher out-of-pocket expenses for health costs not covered by insurance, such as prescription drugs, other medical equipment, dental services and eye care.

Here are some of the ways you can stretch your savings.

• Live frugally and cut out unnecessary expenses
• Stay healthy and vigorous
• Give up the automobile and walk, take public transport or taxis as needed.  You’ll be much better off
• Keep working part-time or make money out of your hobby
• Use senior discounts to the maximum
• Sell items on EBay
• Learn to cook and cut down on prepared meals
• Grow fruit and vegetables in your garden
• Invite people to your home instead of dining out.
• Buy any needed items on Craigslist or at Value Village
• Sell unwanted belongings on Craigslist.
• Have a financial planner and meet say twice a year to see if  you are still on track

As a retiree, you have fewer work-related expenses, you pay less in personal income tax and you contribute less to public benefit programs.  Since there is no need to leave an estate, with careful living you can enjoy what you have to the maximum and hope to die when your time comes just a little better than broke.

Related articles by Zemanta

• 7 Reasons to Downsize in Retirement (usnews.com)

Technorati Tags: Financial plan, Health insurance, Income tax