Painless Ways to Downsize During Retirement

Tips to simplify your life and cut costs

We’ve seen this movie before — sky-high stock prices, sky-high real estate prices and the Fed raising interest rates. We also saw how those times ended in 2001 and 2008. At this point, my retired clients want to simplify their lives. So, let’s talk about some painless ways to downsize during retirement:

1. Is your house right for you? My dad, Stuart Kirsner, founder of Stuart Estate Planning, is 72 and he’s been a licensed insurance and annuity agent and family legacy planner for the past 46 years. Last year, he sold his 6,000 square-foot home near Boca Raton and downsized to a 2-bedroom condo on the intercoastal with beautiful ocean views in east Boca Raton. He spends most of the summer months in his home in Asheville, North Carolina; during the winter months, he’s a “snowbird” like many of my clients flying south for the winter in Boca. Dad, like most of my clients, wants to simplify his life and for many people having too much home is not a wise decision in retirement.

   As I wrote on Kiplinger a few months ago, I do believe our economy is in a large bubble that I call the “Central Bankers Bubble”. And in America, we have a recession on average every 5 to 7 years and it’s been 9 years since our last one … so if your home is worth a lot of money, it might be a good time to sell that home, lock in the value and either downsize to a smaller home or rent for a few years with the goal of possibly buying a home at a potentially lower price should this bubble burst. That’s what I’m doing currently.

   Another idea: some retirees are even using online home rental services like AIRBNB.com or HomeAway.com to spend their retirement living in a different city each month, renting a home wherever they want using these online services. It’s a flexible, fun way to see and really experience cities around the world.

2. Do you need a second home? Most of my retired clients want to simplify their lives at this point and owning a second home is an expensive retirement cost – especially when you think of your equity that’s tied up that you could invest and possibly make a return on, instead of that second home being a cost.
3. Do you need a second car? With ride-sharing services, perhaps it’s best to only own one car and use Uber and Lyft as needed. This is like a taxi that you call with your phone. It’s easy and extremely convenient and I’ve used them for years.
4. Do you need an expensive cell-phone plan? Low-cost cell phone services such as Sprint could be as low as $40 a month.
5. Do you need a home phone land-line? Many people only use cell phones at this point and ditch the landline. I did that too, many years ago.
6. Do you need all those cable channels? Do you even need cable at all? With online streaming services such as Netflix, Amazon, and HBO Go, maybe you don’t need it. And you can watch regular channels for free as well.
7. Go see movies in the cinema on the cheap nights (e.g., Tuesdays).
8. Happy Hour Specials! Time is on your side, so take advantage of Happy Hour and Early Bird specials if that’s your thing!
9. Make sure you’re not paying too much in fees in your retirement plan. That could cost you a lot! For example, there are a number of fees in variable annuities,² and even some mutual funds might have higher fees.³ That’s one reason we don’t like variable annuities for our retired clients. We also prefer to use institutional mutual funds and ETFs with the goal of keeping our clients’ internal fees low.^4&5 Also, be aware of the fees you pay your financial advisor as well.
10. Lastly, make sure you don’t have too much risk in your retirement portfolio. As I wrote on com, I do believe we are headed towards a recession. In America since WWII, we have had a recession on average every 5 years and it’s been 9 years since our last one.⁶ Recently, J.P. Morgan increased their odds of a recession occurring over the next 2 years to 70% due to the Fed still raising interest rates, the prospect of a trade war with China, and the Democratic-controlled Congress starting in January that will make it harder for President Trump to pass more fiscal stimulus packages.⁷ Most of my retired clients don’t ever want to lose another 50% of their portfolio again.

At this point, my retired millionaire clients want to preserve and protect their wealth and simplify their lives. So, many of them are looking at ways to do this using some of the strategies above. Adding these cost-saving measures up could save you potentially tens of thousands of dollars each and every year.

Stuart Estate Planning has an A+ rating from the Better Business Bureau. We’ve built our reputation on prizing client relationships and prioritizing their futures. Learn more with Craig’s book on Amazon: Retire With Confidence: Preserve and Protect Your Wealth And Leave A Legacy or by attending an upcoming complimentary dinner workshop at Ruth’s Chris or Abe & Louie’s Steakhouse in Boca Raton or Fort Lauderdale. This workshop is best suited for those over age 60 with between $500,000 to $10,000,000 in investable assets. Call our office to register now at 1-800-807-5558.

About the Author, Craig Kirsner, MBA:

Craig Kirsner, MBA, is a nationally-recognized Author, Speaker and Retirement Planner, who you may have seen on Kiplinger, Fidelity.com, Nasdaq.com, US News & World Report, MSN Money, CBS, ABC, NBC, Fox, Bankrate.com, Yahoo Finance, and others. Craig is the author of Retire With Confidence: Preserve and Protect Your Wealth and Leave A Legacy and creator of the Preserve and Protect Retirement System. He has undergraduate degrees in finance and risk management from the University of Florida, as well as an MBA in finance from the Chapman School of Business at Florida International University. He has passed the Series 63 and 65 securities exams and has been a licensed life insurance agent for 25 years.

Sources used:

https://www.kiplinger.com/article/investing/T047-C032-S014-what-is-central-bankers-bubble-and-will-it-burst.html

https://www.fidelity.com/viewpoints/retirement/shoppers-guide-to-annuity-fees

https://www.cfapubs.org/doi/sum/10.2469/faj.v69.n1.6

https://www.investopedia.com/terms/i/institutionalfund.asp

https://www.etf.com/etf-education-center/21012-why-are-etfs-so-cheap.html

https://awealthofcommonsense.com/2015/02/when-will-the-u-s-have-its-next-recession/

JPMorgan: Odds of Recession in Next Two Years Skyrocket to 70%

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Stuart Estate Planning Wealth Advisors have not affiliated companies. Stuart Estate Planning Wealth Advisors is an independent financial services firm that creates retirement strategies using a variety of investment and insurance products. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to safety and security generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.  696811