Retirement Redesigned

Our online course is live! See the menu for details.

Wednesday, April 17, 2024

Retirement Redesigned

HomeMoneyManaging The Rising Cost of Living

Managing The Rising Cost of Living

This post is a duplication of our newsletter, The Weekly Reset, where we review a key theme each week. In the spotlight this week: Managing the rising cost of living. What are your favourite hacks to beating the rising cost of living, in retirement?

A note from Johann

Mindful Money Management

A vital asset in retirement

Even fortunate people that are well provided for in retirement have concerns about their finances. You may have the benefit of payments from your pension, but suddenly there is no longer a regular full salary and the comfort of knowing that you have a proper manageable income stream. Instead, there is the awareness of drawing down on your savings and meeting your burgeoning expenses within the rising cost of living.

We know that retirement requires an alternative approach to life and the need to adapt to many changes. Trying to maintain the lifestyle you’re used to and practicing the same spending habits that evolved during your working life can be detrimental to your retirement finances. The first stage of mindful money management in retirement is to develop a sound awareness of all your finances. Your approach should be structured within a carefully considered budget. Easier said than done, but a critical first step in keeping yourself on track.

Next, you need to decide which costs can be sacrificed and which ones are truly important to you. Your values can be your guide in this process. Lisa Linfield, our webinar guest last week, is an expert in financial planner and mindful spender. When she and her family took stock of what their expensive lifestyle in Johannesburg really meant to them, they decided to make a few important changes. They moved to a smaller house and a lower cost lifestyle in another province. Their real pleasure comes from having good holidays and experiences together and with this in mind it was an easier decision to be more frugal about their day-to-day expenses and put the money they save this way toward the holidays they enjoy together as a family.

The critical thing she talks about is taking control of your budget. It must be built around your values and what is important to you. You must manage the money and not let your money manage you.


Our top pick this week:

Our take: The rising cost of living is a challenge for many people. This article by The Balance offers some helpful suggestions for ways to think about saving money, spending less and making use of available discounts. Click the article link below to read the full description of each suggestion for this useful resource.

10 Best Ways Retirees Could Live Well on Less

Whether or not you look, feel, or act like a senior, you can certainly use age to your advantage.

Shopping bags
  1. Use Bargains and Benefits – don’t be shy about asking for a senior discount even if one isn’t advertised.
  2. Make it fun and Intergenerational – encourage family members to join your new way of thinking.
  3. Allow Choices – having flex money rather than strict categories works well for many.
  4. Use Systematic Withdrawals – once retired, don’t give yourself unlimited access to investment funds.
  5. Consider Housing Alternatives – Roommates offer companionship and help you both save money.
  6. Use Public Transportation – What about adopting the new approach and thinking about ways you could go without your own car?
  7. Vacation for Less – Travel does not have to be expensive.
  8. Use Government and Nonprofit Organizations – Community resources are there for a reason. If you are part of the community, ask for the help you need.
  9. Stay Healthy – some of the simplest ways to stay healthy are also the least expensive, like taking a walk every day.
  10. Manage Debt – Use debt wisely.

Click here to read the whole article on The Balance

Our Spotlight video:

Managing The Rising Cost of Living

We look at ways to manage the rising cost of living. With rising inflation, living within our means becomes even more important in retirement where we may not have access to additional income streams. What steps can we take to help us prepare for the changes that lie ahead? We suggest starting with proper awareness of your circumstances and using this as a base to adjust behaviours where necessary. This can feel like a daunting task but it is also an empowering and liberating one.

Click play to watch our spotlight video of the week

Weekly spotlight

Other highlights for the week:

Our take: Being aware of where our money goes is a step toward managing the rising cost of living. The money we spend is one thing, but there are also discounts available to us that we may not be aware of. This article is aimed at older adults and points out some pitfalls we may not be aware of as well as some good options to take note of.

18 Ways Boomers Waste Money In Retirement

Not-So-Smart Spending

Elderly woman and a younger woman emulating them working on finances.

Congratulations! After years of working and careful saving, you get to kick back and crack open that retirement nest egg. But don’t get too giddy just yet. Retirees still need to avoid plenty of financial pitfalls — like providing financial support to adult children, as a surprising percentage of parents have admitted to doing in a new study — as they transition into their golden years.

Supporting Adult Children — Still – It can be rough out there for young adults — inflation is raging, it takes longer to save for a house, and college loans can be oppressive.
Buying Too Many Gifts for Grandkids – We know, we know — you want to spoil them. But before that flashy new toy or adorable outfit just seems to jump into your cart, remember that it’s not just your wallet you may save if you refrain.

Ignoring the Library – With retirement comes the gift of time — time, for instance, to browse the wonders that are available through your public library.

Skipping Senior Discounts – there’s no reason to let pride get in the way of a good discount.

Chasing ‘Bargains’ – Bargain hunting can be fun, but if you’re not careful, it can become an addiction, not to mention an expensive way to fill the hours.

Blindly Paying for Life Insurance – If your children are grown and flown and major debts are paid off, think critically about whether a new policy makes sense — especially since life insurance gets pricier as you age.

Maintaining a Large Home – Getting a smaller residence can mean big savings on insurance, taxes, utilities, and mortgage payments.

Spending Big on Travel – with a flexible schedule, it’s easier to travel outside of a destination’s peak tourist season.

Indulging All Your Vices – You may feel like you’ve earned the right to let your hair down and “live a little” in retirement, but moderation is key.

Driving Two Vehicles – If you and your spouse are no longer dealing with dual commutes, consider whether you can get by with one car instead of two.

Insisting on Name-Brand Medications – It’s worth consulting your doctor to see whether there’s a generic available for any given prescription.

Getting Unnecessary Tests and Screenings – Retirees are conditioned to expect that they’ll spend more on health care as they age.

Giving to Every ‘Charity’ – But be vigilant against feeling that you have to give to every cause.

Ignoring the Money-Saving Power of Smartphones – One of the best ways to save? Shake off any technophobic tendencies and harness the power of that smartphone or tablet with money-saving apps.

Not Having a Withdrawal Plan – Finally getting to tap that retirement nest egg can be an exciting feeling, but doing it willy-nilly can leave you on the hook for big taxes if you’re not careful.

Click here to read the article on Cheapism

Download the My Reset app

Elderly couple at the pool representing the happiness they find out of using the app

Click here to find out more about My Reset app
Download it here from the Apple store
Download it here from the Google Play store

Wildcard Pick of The Week

The world’s best retirement destinations might surprise you
Click here to read the full article on World Economic Forum

Most Popular Quote of the Week

He who buys what he does not need, steals from himself. – Swedish proverb
Click here to follow our Instagram page

Swedish proverb – He who buys what he does not need steals from himself.

Weekly Question

Last week’s poll and responses:
What are your favourite tricks to beating the rising cost of living?
• Plan meals in advance
• Always have a shopping list & never go shopping when you are hungry.
• Start having a Meat Free Monday and extend it to more days of the week – veggies are cheaper and healthier
• Use a pay as you go mobile package – it’s cheaper
• I check my subscriptions regularly to cancel the ones I no longer use.
• Many shops have senior discount days – I go shopping on those days

This week’s poll question:
What is your favourite memory of your grandparents?
Click here to answer the question in our Facebook group

To get more information and resources like this in your inbox weekly, subscribe to our newsletter here.

Johann is the founding partner of Reset Retirement where we focus on assisting people with planning for the non-financial aspects of their lives after full-time work. He had a long career in executive search and leadership as the founding partner and chairman of Heidrick & Struggles in South Africa where he was the head of the company’s board practice.