5 Keys to a Frugal Retirement

When we think about frugality, many of us consider the here and now.

However, it doesn’t hurt to consider that you might need to be frugal during retirement as well.

While many of us hope to be able to forget about frugality during our golden years, the truth is that you never know what will happen in the future to create uncertainty in your finances.

It makes sense to be prepared to live frugally in retirement, if the need should arise.

Here are 5 things to keep in mind as you prepare your retirement finances:

1. Downsize

The bigger your lifestyle in retirement, the more it will cost to maintain it.

Even if you have your home paid off, there are downsides to a larger abode.  A larger house usually means higher utilities and property taxes.  Additionally, you have to worry about maintenance and repairs.  If your home is an older one, there is a good chance that you will need to pay for expensive repairs.  And, as you age (or travel the world), you will need help keeping your home maintained, from the yard to housecleaning.

All of this costs money.

Whether you have a larger home, or multiple cars, having a bigger lifestyle can drain your nest egg.  If you are concerned about how long your nest egg will last, and you want to reduce costs, one of the best ways to do so is to downsize.  Consider your needs, and what your make for a comfortable retirement.  Start out your retirement with a smaller lifestyle, and your frugality in this area will allow you to use your money on items that might be more important to you in the long run.

2. Reduce Your Obligations

Few things can ruin your retirement like debt.

Reduce your obligations so that you have fewer demands on your retirement income.  Try to pay off credit card debt, car loans, and even your mortgage before you retire.  Create a financial plan that allows you to become debt free by the time you retire.

Paying interest drains your wealth, and can lead to a less than successful retirement if you aren’t careful.

On top of that, it helps to avoid entering into long-term commitments just prior to retirement, or during retirement.  Keep your finances flexible by avoiding entanglements that can tie them up.

3. Consider Which Expenses You Can Cut

cut expenses to be frugal in retirement

Look into what expenses you can cut in your retirement if you need to be frugal.

Another part of frugal living — in retirement or out of retirement — is knowing which expenses you can cut.

While you don’t want to cut down to the bone if you don’t have to, you should still be prepared to make cuts. In uncertain times, it might become necessary to cut your withdrawal rate, reducing how much money you have have coming in each month.  Consider, ahead of time, which items you are likely to be fine without.  Prioritize your spending, and consider spending money only on the things you really need, or truly enjoy.

Indeed, your frugal retirement can ensure that your money lasts as long as you do, even if you end up needing long-term care, or you have other expensive needs.  Know what’s important to you, and cut out the other items.  You’ll enjoy your retirement more, and your money will go further.

4. Take Care of Your Health

No matter your age, one of the best things you can do for a frugal retirement is to take care of your health. You might want to travel in retirement, but how can you if you don’t have good health?

Health problems can also cause a lot of expense.

If you make an effort to live healthy now, eating better and exercising, chances are that you will have a less expensive retirement later.  You won’t need to spend as much on prescriptions, or on doctor visits.

While there is no way to completely guarantee that you will never have sickness, or get cancer, you can reduce your chances of health problems.  A healthy body is a less expensive body, and as you age your health becomes more important.  Your money will last longer if you have better health.  Do what you can to stay as active as possible, and stave off disease through better lifestyle choices.

5. Look for Other Sources of Income

You can improve your retirement finances with the help of alternative income sources. Consider building an income portfolio right now, so that it is there later.

You can also consider part-time work during retirement.  Many seniors feel lost when they quit their jobs.  You can assuage these feelings with a part-time job that can also help you reduce your reliance on your nest egg.

There are also other options, such as the Peace Corps, and other programs that can provide you with the opportunity for frugal travel and living, as well as (possibly) a small stipend.  Consider these types of options, as they can help you save (and even earn) money while still enjoying a fulfilling retirement.

What suggestions do you have to be frugal in retirement?

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Published or updated August 21, 2016.


  1. I think downsizing is a great idea because it means less to clean too! I personally think I will be doing some sort of project to make a little extra spending money in retirement but I doubt it will be necessary to do so if I continue to be disciplined in my savings!

  2. Jenna, Adaptu Community Manager says:

    Volunteer. You have accrued a large amount of information to pass along. Plus, it helps you stay social and use your mind. I think keeping healthy is key, but more important keeping your brain working into retirement as well.

  3. I love the idea of a living a frugal retirement because it means I can achieve it earlier and help my younger family members who may not be as well off.

  4. I think there is a case for settling for a large part of the year abroad. You can live in a Thai comfortable hotel for $20 a night in many parts of the world. If you pass on your home to siblings and they are left to do maintenance and such things as their rent you can keep your property for no cost and give something back to your family too.

    All these tips can be done well before retirement too!

  5. Jazzmary Daniels says:

    This is a collection of very wise advise.. I am now entering my second year of retirement. . and aside from the healthcare premiums being continually jacked-up, by doing what you advise here, it is a good retirement so far..

  6. I definitely agree with downsizing. I believe we do not need a large home when we retire, either the children have their own family or are living on their own. It will only be my husband and me in the house. Consequently, a smaller home will also help us cut some of our expenses, such as rent/mortgage, water and electric bills.

  7. Excellent article. I was widowed early in my marriage and took many steps to be able to live within my paycheque while raising two children on my own. The first thing I did was move to a very nice house in a reasonably priced neighborhood. I then did little things like always turned off lights or appliances that were not in use. I have replaced side by side fridges by a top freezer and bottom fridge, less expensive to operate, less prone to repairs, cheaper to buy. I always buy a car two to three years old and I stay with quality brands Honda or Toyota. I let my auto mechanic know when I am looking again and he lets me know in advance if a car comes in that he thinks is in great shape. I buy about every 5 years and the difference is about a $1000 a year and I have never had major repairs, just oil changes and the like. There are lots of little ways you can stay within your means.
    Teddi Knight

  8. Peter Bowen says:

    A frugal retirement meant a move to the beaches of Thailand for me. I live a lifestyle I just couldn’t touch in the US. A luxurious three bedroom condo tucked in a jungle setting, five minutes to a world class beach and a very active social life.

    It’s not necessary that I try and live frugally. It isn’t necessary. My total monthly budget is $2500 a month. I couldn’t live this in America for $10,000 a month. Consider all your options when making retirement decision. This has been a great one.

  9. So very true. If only more Americans would take these lessons to heart. Living a healthy, efficient lifestyle over time can work wonders.


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