Help Clients Reduce Expenses To Boost Retirement Wherewithal

Those first three items might be holdovers from preretirement, but retirees in good health might benefit from reassuming those chores. Eliminating weekly yard service and housecleaning, as well as periodic car detailing, could save thousands of dollars a year.

Now, that isn't to say that reducing discretionary expenses means eliminating the little joys in life, but it does mean looking long and hard for alternatives to paying for them.

For example, public libraries have best-selling books and many magazines and newspapers, which also are available in free and convenient online versions. Many people who have cell phones have been able to eliminate their home landlines. With a little planning, one can prepare meals at home that are often faster, not to mention healthier, than going out to get fast food. As for movie viewing, renting a DVD for $4 or $5 is far cheaper than paying $8 or $9 a person at the theater.

Clients might be surprised to find that they can eliminate or reduce some of their "mandatory" expenses as well. Although people assume that it is cheaper to own a car or a home, in some cases, it might be cheaper to rent. For older retirees who seldom use their cars, taking advantage of transportation services that cater to seniors may make more sense.

Retirees who split their time between two homes, having a second home in a warm weather location for the winter months, might find it cheaper to have a long-term rental in one location versus paying expenses for maintaining two homes.

Another way to reduce mandatory expenses is to take advantage of the numerous discounts available to seniors. Many grocery stores give those over age 60 or 65 a discount one day a week. A 5% discount on $200 worth of groceries saves $10, or $520 a year. Seniors also receive discounts on prescriptions, utilities, and even property taxes in many locations.

The key is to find out about and take advantage of all the savings offered to seniors.

Advisors can be a key to a long and happy retirement by helping clients find ways to reduce their expenses, taking some of the pressure off of the income side of the retirement planning process. If clients can live comfortably on less income until their retirement accounts have time to recover, they will thank the advisors who helped them to reexamine their bottom lines.

Kristen Falk, FLMI, FFSI, AAPA, ACS, AIAA, AIRC, ARA, is a senior writer with LOMA in Atlanta, Ga., specializing in annuities and financial planning. Her e-mail address is [email protected].