I learned to live a lot cheaper after losing my job at 58, which allowed me to retire with below average income.
After being fired, I spent 18 months looking unsuccessfully for a position that reflected my experience and education. I ended up working in an administrative office at 40% less salary.
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Although I was already a thrifty and cautious person, my life became much leaner over the next four years, until I retired at 64. Here is how I got out:
Lodging. Living alone in a two bedroom condo, I decided to take a roommate. I didn’t really want to share a living space in my 60s, but my roommate’s rent helped me a lot over the next three years.
Transport. I took advantage of the free bus passes subsidized by my employer for my business trips, thus saving on parking and gasoline. I had to get up very early – and get home late – to catch the bus on my route, but it helped save my paid 2007 car.
Medical. For many years, I have had a CareCredit card to pay for extraordinary medical or dental expenses. I always made sure to pay it back before interest accrued. I have also tried to stay healthy through diet and exercise.
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Groceries and household items. I planned all my meals and shop carefully, going to several stores each week. I ate lunch at work every day except payday. I have also found that most of the household items you can buy in dollar stores are just as good, or almost as good, as those in more expensive stores.
Vacations. I have gone for a few long weekends each year to places that are easily accessible by car. I usually stayed with friends or family.
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Entertainment. I never had anything more than a really basic cable, even when I was making more money. No CNN, Weather Channel, MSNBC. But I quickly cut the cable entirely, and did it sooner than most people. Also, I rarely went to restaurants, bars, movies, concerts or the theater.
Clothing and gifts. I am a big fan of low cost stores such as TJ Maxx TJX,
Marshalls and Ross ROST,
I haven’t paid full retail price for many years. And you might be surprised at the beautiful, and even new, items you can find in thrift stores.
When my employer offered a modest incentive to take early retirement to cut expenses during the pandemic, I was happy to leave. I had determined that my social security and state pension would be almost equal to my take-home pay. Both checks are heavily based on my early years in the workforce, when I had a much higher salary.
During my first year of retirement, for the most part, I was able to live for even less:
I have more time to plan and cook homemade meals, so I no longer rely on frozen meals as often. I also see the benefit of preparing larger meals and freezing portions. I wrote about retired cooking for Medium.
I can wear pretty much the same clothes all the time, so I don’t buy much new.
For entertainment, I subscribe to five streaming channels and still pay less than my previous cable bill.
I no longer have a roommate. Some good news: the value of my condo is finally showing a decent price appreciation.
Unfortunately, I felt the need to buy a newer car, as I wrote in October. This means that I now have a car payment, but I also have a more reliable vehicle. When I retire, I have time for long road trips, instead of flying and renting a vehicle. And I think I camp more often when traveling because the Honda Fit can be adapted for sleeping. More importantly, in these days of shocking gas prices, it gets 33 mpg in the city and 40 on the highway.
As my retirement was entirely during the pandemic, I got used to eating almost all of my meals at home. I could never live off my income if I went out to restaurants as often as most people. When I went out to eat a few times earlier last year, I never got to finish my portions. Not only do I save a lot of money by rarely eating out, but I also save calories.
I have to pay a lot more for medical insurance. The subsidized coverage from my former employer only cost me $ 50 per month. But my Medicare Part B climbs to $ 170.10 per month in 2022. I chose a Medicare Advantage plan when I turned 65 last summer, which has no premium. So far the coverage has been fine. I took advantage of the unique opportunity to transfer part of my IRA into a health savings account with no tax penalty. Fidelity Investments provides a convenient debit card linked to this account.
Inflation, of course, makes my low-cost retirement more difficult. This is why I am writing a Medium blog and as a freelance. I don’t expect big deals, but it’s nice to have some extra spending money.
This column originally appeared on Humble Dollar. It has been republished with permission.
Ron Wayne spent 26 years working for newspapers in Pennsylvania and Georgia before becoming editor of the senior press office at the University of Florida. During his 10 years working there, he obtained his Masters in Mass Communication and taught as an assistant in the College of Journalism and Communication. Since retiring last fall, he has led a simple life, including reflecting on his experiences on Medium.com. Check out Ron’s previous articles.