Saving Money in Retirement

     I was visiting my sister in Jacksonville, FL, who is a self-proclaimed cheapskate. Maybe for that reason the topic of saving money came up . . .

     . . . because for many people, retired or not, the prospect of life without a paycheck is scary. Then the financial experts stoke our anxiety by saying we need a lot of money, as much as $1 million, or 20 times our old annual salary, saved up to provide a comfortable retirement.

     The financial experts are right, in principle. We do need a lot of money to retire -- in the form of Social Security, plus pensions and 401K plans and IRA balances, as well the value of the help we get from family and friends. But my sister and I decided maybe we don't need quite as much as the experts would have us believe.

     Why? Because after we retire, our expenses go down. And there are plenty of pain-free ways to push them even lower. Here are some that we came up with, maybe you have others.

     Clothes. This is the first idea my sister offered. You don't need any more expensive business suits, or uniforms that you have to pay for yourself; no more need to buy and inventory a closet full of shoes for every occasion. (My sister does have closets full of clothes, but hardly anything that she's bought since she retired seven or eight years ago.)

     Commuting costs. We no longer have to buy a commutation ticket for the train, or pay bus fare or parking fees. If you drive 20 miles to work every day, you'll save almost 10,000 miles a year, which at the IRS mileage allowance of 54.5 cents a mile, equals more than $5,000 a year!

     Lose a car. If you're no longer commuting, maybe you can sell off one of your two or three cars, because you don't really need it anymore. In my sister's case, she and her husband still have two cars; but her husband sold his motorcycle when they retired.

     Move. My sister is retired in Jacksonville, where the cost of living is already low. But you don't have to relocate to Florida or Arizona to save money. I moved from New York to Pennsylvania, some 120 miles away, and now save almost $10,000 a year on my real-estate tax alone. Sometimes moving 20 miles farther out from your business hub can save a huge amount of money in housing and other living costs.

     No more kids. My sister doesn't have any kids, but I have two of them and I know that you spend a lot less after your kids have finished school and  moved out on their own. No more college tuition; no more sports equipment and sports club fees. Now they buy their own clothes . . . and you can't believe how much you save on your grocery bill!

     Entertainment. I assume everyone asks about senior discounts wherever they go. In our case, on Wednesday when it was too cold to be outside, we went out to lunch, instead of going out to dinner, and got pretty much the same meal for half the price. Then we hit the movies for the afternoon matinee . . . for $8 a piece instead of the usual $11. (We saw If Beale Street Could Talk -- I liked it, she didn't.)

     Travel. Of course, you can always spend boat loads of money if you go first class to all the hot spots. But the beauty of retirement is that you can travel mid-week, when air fares are cheaper; you can go during the shoulder season, when rates are lower. And . . . you can go visit your sister who will put you up for free!

     Save on saving. We're retired, so we no longer have to save for retirement. In my case, the kids are through college so I don't have to save for their college tuition. Since we no longer get a paycheck, we're no longer subject to the payroll tax. Instead, we are now, finally, on the receiving end of Social Security and Medicare!