Didn’t Save Enough for Retirement? 10 Ideas to Retire on Less

In How Much Money Do You Need to Retire?, I demonstrated a way to estimate how much money you need to save for retirement. When I discussed this with my wife, she asked, “what if we don’t save enough?” After giving it some thought, here are some ideas on how to retire with less money.

Retire On Less

  1. Adjust your lifestyle now — If you know you won’t have enough money, you have to make changes now: be frugal, reduce your bills, save more, learn to invest. Start today…don’t wait.
  2. Learn about passive income — The only way to stop working is to have more passive income than your living expenses. Learn about different ways to make money other than your day job, and start to build, diversify, and shift your income streams. Here are some actual examples of alternative and passive income streams.
  3. Collect everything you’ve earned— In addition to the obvious, like Social Security and your retirement savings, there are other hidden sources of income:
      • Call your former employers to see if they owe you any pension payments
    • Check your life insurance policy. If you have whole life insurance, you probably have some cash value in the policy that you might be able to leverage.
  4. Stay in your job longer — Assuming you have alternative income, but it isn’t enough yet, consider delaying your retirement. There are several advantages with this option:
    • You don’t have to tap into your retirement savings right away, allowing your investment to keep growing
    • Your retirement money doesn’t have to stretch as far
    • You can continue to contribute to your retirement savings
    • You can enjoy greater Social Security benefits. For example, my parents will be 66 in 4 years. If they start taking Social Security benefits now at 62, they will only get 75% benefits. However, they could wait until 66 to get 100% benefits, or 70 to get 132% benefits.
  5. Supplement your income — Many people continue to work in retirement. They tend to do something that pays less than what they used to earn, but the job is often more enjoyable and rewarding. Options include side businesses, seasonal employment, and part-time jobs.
  6. Move to a cheaper part of the country — Good weather is not the only reason to move. For example, this cost of living index shows that Memphis, TN, El Paso, TX, Topeka, KS, Oklahoma City, OK, and Springfield, IL are some of the cheapest place to live. Of course you have to take other factors into consideration, like friends, family, health care, and neighborhoods. Take a look at CNN Money for the best places to retire in the U.S. and Sperling’s BestPlaces for more ideas.
  7. Retire abroad — This is definitely not for everyone. It requires a lot of research and preparation. But for some people this is a desirable option. For instance, if my wife and I decide to retire in Thailand, we could probably live on one fourth of what we would need to retire here in the U.S. Here are some good articles about retiring abroad:
  8. Find a roommate — This option is not just for the young crowd. If moving from the neighborhood you’ve lived in your entire lifetime is not your cup of tea, you can lower your expenses and supplement your income by sharing your home or apartment with a roommate.
  9. Move in with your child — I know this is very uncommon in the U.S., but this is a standard practice in many countries. As long as everyone can agree to live together, this is a practical way for elderly parents to retire on less. This works better if the arrangement is mutually beneficial to both parties. Here is an article that discusses preparing to live together with elderly parents.

Do you have another idea not listed here? Please do share!

About the Author

By , on Mar 6, 2008
Pinyo is the owner of Moolanomy Personal Finance. He is a licensed Realtor specializing in residential homes in the Northern Virginia area. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, and financial literacy author.

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Leave Your Comment (6 Comments)

  1. MoneyBlogga says:

    @Pinyo – Yea that’s what I was alluding to ….. have one kid live in Hawaii, one in the Florida Keys, one in New England …. you get the idea 😉 Then I move in with each of them on a quarterly basis. I’m sure they’ll be thrilled.

  2. Badger says:

    Nice overview–one comment I would add regarding retiring overseas is that there are tons of people out there only too happy to scam retired Americans out of their savings. Before deciding to spend your golden years overseas–and definitely before buying property–call the U.S. Embassy in that country and have a talk with an officer from the American Citizens Services section. They’ll be able to tell you whether Americans have had trouble buying property and can even give you a list of local lawyers who may be able to assist you.

  3. Jerry says:

    In addition to retiring in another state, there are other countries with high standards of living and a lower cost of living (food, insurance, home ownership, etc.). In fact, travel to some of these locales will lead to a shorter trip for family and friends than flying cross-country. It’s one more possibility, at least!

  4. Pinyo says:

    @MoneyBlogga — It’s there as #10. Unless you specifically mean rotating among your children.

  5. MoneyBlogga says:

    I would’ve added “move in with the children” because, since realizing that I’m on the road to financial Palookaville, I have told them to move to fun places when they’re older so that I can rotate my living arrangements between the 4 of them 😉 3 months here, 3 months there, and so on. Obviously, the ideal scenario would’ve been to have started saving much, much earlier but ….. I didn’t do that.

  6. fathersez says:

    This is a great overview.

    For me, my younger kids’ education may be a big bill, though it’s some way off. I am redoubling my efforts to try to ensure that the children’s grades are good enough for scholarships and the like.

    (For the elder girls, I did not focus like this and this year would be the final year of paying through my nose, so to speak….hehe)

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