Keeping costs down is always important. However, it's essential in retirement if you're living on a fixed income and don't want to run out of money.
Fortunately, there are several money-saving moves you can make. And there are several programs that can help retirees cut costs. Follow these 12 tips to save money in retirement.
Get a better deal on health coverage
You might have supplemental Medicare coverage – often called a Medigap plan -- from a private insurer to fill the gaps in their coverage from Medicare Part and Part B. Or you might have a Medicare Advantage plan, which is an alternative to traditional Medicare.
The cost of Medigap plans and Medicare Advantage plans vary from provider to provider. You could use free services such as Boomer Benefits and Chapter to help you compare plans and find the best rate.
[ Keep Reading: 15 Government Benefits That Could Help Seniors Save Money ]
Pay less for prescription drugs
Medicare Parts A and B don’t provide prescription drug coverage. It might be worth it for you parents to pay a little more for Medicare Part D prescription coverage or a Medicare Advantage plan if you take a lot of high-cost prescription drugs. And some pharmaceutical companies help pay for medications for people enrolled in Medicare Part D through the Pharmaceutical Assistance Program.
Medicare also has a program called Extra Help for low-income adults that limits the cost of generic drugs to $3.50 and brand-name drugs to $8.95. If you don’t qualify for Extra Help, you might be able to get help with prescription costs from a state pharmaceutical assistance program. Also, if you don’t have Medicare Part D coverage, you can get a free FamilyWize Prescription Savings Drug to save on medications.
Save on eye exams
Some Medicare Advantage plans cover eye exams and the purchase of glasses, but Medicare Parts A and B do not. So if you need help paying for vision care, they might qualify for free exams through EyeCare America. And New Eyes for the Needy provides prescription glasses for low-income adults who can’t afford glasses.
Reshop insurance coverage
Your loyalty to your auto, homeowners or rental insurance provider could be costing you. Reshop your insurance coverage every year or so to see if you can lower your premiums by switching insurers. For example, a 2017 study by personal finance website NerdWallet found that good drivers miss out on an average of $416.52 in annual savings by not shopping around for better auto insurance rates.
You can get quotes from multiple insurers and compare rates on a site such as Insure.com. Or you can work with an independent agent who can shop around for the best rate for you.
Ditch unnecessary insurance
You might be paying for life insurance policies you no longer need now that you're retired and no longer have children to support. If you have enough cash to cover final expenses such as a burial, you might want to ditch your life insurance policy.
If you have a permanent life policy with cash value, you could surrender the policy and get the cash value in a lump-sum payment that could help cover other costs. (Term life policies don’t have any cash value.) You might want to consider hanging onto that policy, though, if you don’t have another way to pay for long-term care. You can take loans from the cash value to help cover the cost of care if necessary.
Cut the cost of cell service
You might be able to dramatically cut the cost of cell service by switching from a major carrier to a wireless service reseller such as Cricket, Consumer Cellular and Republic Wireless. Compare cell phone plans at MyRatePlan.com to see which carrier offers the best value based on how much data you use, how many minutes you need and how many people will be on your plan. Also, ask providers about senior discounts, which many cell phone service companies offer.
If you have limited income, you might qualify for Lifeline. This federal program lowers the cost of phone or Internet service by giving qualified customers up to $9.25 for their bill. Visit lifelinesupport.org to see if you qualify.
Reduce energy bills
You might be able to get cheaper service by shopping around for lower utility rates if you live in one of the states with deregulated electricity or gas markets. ElectricChoice.com has a map of deregulated energy markets and a tool to compare rates. Because providers are competing for business, you might be able to save money by switching.
If your income is low enough, you might qualify for the federally funded Low Income Home Energy Assistance Program. The Department of Health and Human Services has information on where and how to apply for assistance.
Negotiate monthly bills
You might be able to get better deals on cable TV, Internet, phone and other services by calling providers to negotiate. You can compare plans for TV and Internet at a site such as Allconnect.com. Then you can ask your service providers if they can match their competitors’ prices – or you could simply switch providers.
If you don’t like the idea of negotiating lower rates, you can use a service such as BillCutterz to do the haggling for you. Its negotiators will call providers and will split the savings 50/50.
You might also have recurring bills or subscriptions that you forgot you signed up for. You can use a service such as Carefull to automatically identify all of your bills and subscriptions, get notified if any are running late and ensure that nothing is slipping through the cracks.
[Find Out: How to Put Your Finances on Autopilot]
Eliminate unnecessary fees
You could be paying monthly maintenance fees on their checking and savings accounts. These fees can range from $5 to $15 a month, according to Bankrate. They can be easily avoided, though, by switching to a free checking or savings account.
Check your investment accounts to see what sort of fees you’re being charged. Even small transaction fees and annual fees can eat away at the value of your retirement portfolio. So switching to a low-fee brokerage such as Charles Schwab, Fidelity or Vanguard could help you save money over time.
Also check your checking account and credit card statements for monthly or annual charges for services or subscriptions you’re no longer using or don’t need, then cancel those services.
Downsize to a lower-cost home
You can trim a lot of small expenses from your budget, but your biggest expense of all is most likely housing. You might be paying much more than necessary to put a roof over your head if you haven’t downsized yet to a smaller home or apartment.
Consider the benefits of moving: less maintenance, lower costs, more room in the budget for things you enjoy. The National Council on Aging has a calculator you can use to see how moving will impact their finances.
Consider a roommate
If you don't want to move, consider getting a roommate to offset costs. Perhaps there’s a family member who is a recent high school or college grad looking for an affordable place to live. Maybe you have a friend who recently became a widow and doesn’t want to live alone. Or you canconnect with someone who is looking for housing through services like Nesterly or use the National Shared Housing Resource Center to connect with someone who is looking for housing.
Apply for property tax relief
You might be able to cut housing costs by getting a break on property taxes. Several states offer property tax relief to low-income seniors. You should contact your local or state tax administration to see whether tax relief is available and how to apply.