Retire in Luxury

6 Ways to Retire In Luxury With Less Money

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Many dream of a retirement lifestyle in luxury. If you struggling to see how you can manage your current lifestyle in retirement, you are not alone.

It used to be that you worked for a private company for 20-30 years and you would be provided with a nice retirement pension that was more than enough to cover your expenses. Now pensions only seem to be for government employees and a few select companies who happen to offer them. And even the pensions are not covering all of your expenses.

The reality is that many people saving for retirement with a 401k vs a pension plan, are falling short when it comes to retirement savings. According to some experts, the average 401(k) account balance, in 2019, was around $92,000. Seniors are having to find creative ways to live on a budget in retirement. Many seniors today are asset rich and cash poor causing them to get creative with their finances.

Operate a Share House

Share houses are starting to become more popular with seniors but it can be tricky to navigate. Imagine living with one or two other couples or singles in one large estate-sized home. Remember the Golden Girls? Well, now some couples are doing it too.

If you have friends who have an aversion to ending up in a retirement home, this is a great way to live in a community and have each other look out for each other and share expenses. Everyone knows how Blanche, Rose, Sophia and Dorothy made it work. But how would couples be able to work this out?

Senior Couples

Three couples in Australia did just this. After renting a large home together for two years, they decided to take the plunge and build a unique three-unit home. Each couple invested $250,000. They have separate quarters for each couple and common areas for everyone to enjoy. The concern is, of course, the long-term care plans and then the exit strategy. There are many questions that need to be answered. But it can and is being done!

As folks are struggling to live the lifestyle they want in retirement, this may be a great plan for those willing to live in a close-knit community with others.

Become An Ex-Pat

Often, US retirees will become what is called an Ex-Pat (Ex-Patriot) and move outside the US to an area with a significant difference in the cost of living.

US Seniors becoming Ex Pats

Take Ecuador for example. I was just reading about a couple who moved there and their total expenses, including a housekeeper for their penthouse apartment, a robust restaurant and entertainment budget, runs about $1200 a month. Medical expenses in a country like Ecuador are pennies on the dollar compared to the US.

On average the cost of living in popular ex-pat destinations is anywhere from $1-2000 per month. Of course, you need to do research on what best fits your needs and take language barriers and health insurance costs into consideration. Here are the top 20 countries people move to in alphabetical order:

  1. Belize
  2. Bolivia
  3. Chili
  4. Colombia
  5. Czech Republic
  6. Costa Rica
  7. Ecuador
  8. France
  9. Ireland
  10. Italy
  11. Malta
  12. Mexico
  13. Peru
  14. Philippines
  15. Panama
  16. Portugal
  17. Slovenia
  18. Spain
  19. Thailand
  20. Uruguay

There are many things to consider when opting for an Ex-Pat lifestyle, like the stability of the government, friendliness of locals to US Citizens, Visa requirements, and moving away from family. We also recommend that you rent for a year before committing to living in a foreign country. However, most retirees have no regrets when they make the leap.

Something must be working because according to Social Security, over 400k Americans are receiving their benefits abroad. There are also SSA rules that must be met when moving to another country. Like you can not receive your benefits if you are living in a country with sanctions, like Cuba.

Downsize Your Home

Many people want to remain in the home they raised their children in. But you may be biting off more than you can chew as you start aging. Taxes, maintenance and expenses can eat away at your budget. You may also live close in to a metropolitan area where the expenses are much higher when you were working.

Many seniors also may have gained a significant amount of equity over the years which can help to fund your retirement. By downsizing your home you can literally fund your retirement once you purchase a smaller home in a more affordable area.

Move to Another Region or City

If you do not have what you need financially to remain in your current area during retirement, make sure you are open to other ideas on how to reduce your expenses like moving to another city. Often when people do the numbers from downsizing their home, they also find the region or city they live in is also too expensive.

If you are living in New York City or even a suburb of New York, like Long Island, the south can look very attractive. Many from California are retiring to the Banana Belt of Idaho or making the journey to Texas. They are finding low housing costs and tax-friendly states. Some who move to Florida from the Northeast are finding they can afford a better home than what they had for significantly less money. This leaves more money on the table for a better retirement.

Look for areas that are trying to attract retirees with great activities, low property taxes and no state income tax.

Budget, Budget, Budget

Your spending is usually your choice. Making sure you are debt-free and controlling spending can mean the difference between living well or having your finances be a drain. Set a budget and stick to it before and after retirement.

Also, annually, renegotiate your bills. You should be looking to reduce your insurances, interest rates, cable and cell phone bills at every contract renewal. Become a one-car family. Do you and your husband really need two cars and additional insurance during retirement? Overtime $20 a month can save you thousands when you have done it with 3 or 4 different service providers.

Never pay retail is my motto. I will wait for a deal or just simply not buy it. Clothing, vehicles, cruises and other travel all have heavy discounts throughout the year. I would rather get the better room at an off time of year than get the inside cabin at Christmas.

Cut Off the Kids

2018 Merrill Lynch study Showed that parents in the US are spending quite a bit helping their adult children with expenses. Collectively about $500 billion.

Parents paying their children’s cell phone bills, student loans and offering to help with down payments when they purchase a home are all things that take away from your lifestyle. It may be time to cut the cord. Remember, every dime that leaves your pocket is less that you have to travel, explore hobbies, and expand your horizons.

Final Thoughts

Even if you are struggling to come up with ways to live your current lifestyle with what you have allotted for retirement, you can see there are creative alternatives available. You may even be disappointed that you have to make these changes. But sometimes having an open mind and remaining flexible can bring new experiences that you did not think were obtainable.

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32 responses to “6 Ways to Retire In Luxury With Less Money”

  1. Julie Gazdecki Avatar
    Julie Gazdecki

    Budget is definitely the one I need to work on most for retirement. We are horrible.

    1. Tricia Snow Avatar

      Many people struggle with this. You are not alone!

  2. Danielle Ardizzone Avatar
    Danielle Ardizzone

    I’ve often wondered about becoming an expat when we retire – the cost of living is such a draw! Great info – thanks!

    1. Tricia Snow Avatar

      Yes, that is the main reason people do it. There are some cons. like language issues, but when it means being able to live comfortably on Social Security the cons are often overlooked.

  3. Angela Avatar

    The ex-pat idea is something we have thought about and may consider when it comes time. We will take into consideration costs but also we do not want to be too far from our kids as they become adults and who knows where they may make their roots someday.

    1. Tricia Snow Avatar

      That is one of the reasons we are not doing it. The grandkids are too hard to leave!

  4. Barbara Avatar

    Such an interesting topic! We have considered when we are ready to retire to move to an ex-pat community somewhere tropical….I found your info helpful! Thanks!

    1. Tricia Snow Avatar

      Thanks, Barbara! It is exciting to plan to live outside the USA!

  5. Kendra Avatar

    Great tips! I love the “Cut off the kids!” advice! LOL

    1. Tricia Snow Avatar

      That is my favorite too!

  6. heather Avatar

    Excellent tips! I see Switerland is not on that list, I wonder why? Ha I can tell you why, I paid 39.00 for a crappy hairbrush! LOL. I feel blessed in that J&J has a pension and a 401k. I have always maxed out my 401k every year and starting in a couple of years I can do some catch up with it as well. I really enjoy all your financial advice. Thanks for sharing your knowledge.

    1. Tricia Snow Avatar

      Wouldn’t that be a dream! I hear one chicken breast (raw) is over $20 … amazing that a hairbrush is more valuable than that!

  7. Kendra Avatar

    These are some awesome and interesting choices for being able to retire with less money. Thanks for explaining what an ex-pat means too. I see it often and assumed that’s what it meant, but I never really confirmed that. haha

    1. Tricia Snow Avatar

      Lol I personally do not like the term. I almost would not move somewhere else for that reason! I can be a patriot and live in Costa Rica!

  8. Sandi Barrett Avatar
    Sandi Barrett

    Love this! My sister is an ex-pat in the UK. There are so many options. I am looking forward to downsizing myself!

    1. Tricia Snow Avatar

      Less is definitely more in retirement!

  9. Elaina Mogren Avatar
    Elaina Mogren

    All great tips. I wish I would have started my 401K earlier. A shared home is a great option, I would love to live with a few of my friends when were older.

    1. Tricia Snow Avatar

      I think it is too. It is so popular services are starting to pop up to match seniors to the right roommate.

  10. Lisa Manderino Avatar
    Lisa Manderino

    These are great places to consider for retirement. I would love the adventure factor!

    1. Tricia Snow Avatar

      I agree! It can be a whole new world! Literally!

  11. Sabrina DeWalt Avatar
    Sabrina DeWalt

    Not only good advice for retirees but could also work for those who have lost jobs recently.

    1. Tricia Snow Avatar

      Yes! One couple I read about when researching this article had lost their jobs early in 2008. THey were forced into retirement without the funds they needed to stay in the US.

  12. kmf Avatar

    These types of posts of how to retire in luxury (or at least our current lifestyle) are so important for us as we approach retirement. Great financial tips on how to make retirement a reality – I need to audit all our expenses and see where we can renegotiate the amounts as it all does add up. And would love to experience life as an expat at least for awhile.

    1. Tricia Snow Avatar

      There are so many great options! I am not sure I could convince my husband to do it but I am like you. I would like the adventure for a year or so.

  13. Adrienne Avatar

    These are great tips! My husband and I plan to downsize when we retire and travel the country in our camper. Many years away yet but we will make it happen!

    1. Tricia Snow Avatar

      We would like to do that as well but want to keep our home. Thinking about renting it out as an Aribnb is an option too!

  14. Megan Avatar

    I would LOVE to be an expat, even well before retirement! But I’ll keep it in my sights for after 😉

    1. Tricia Snow Avatar

      I think many people would love to do that as well. I would love to have a semi-nomadic lifestyle.

  15. Alexis Farmer Avatar
    Alexis Farmer

    I’d be down for a Golden Girls situation when I retire! Haha. Lots of awesome retirement tips here I’ll keep in mind for down the road.

    1. Tricia Snow Avatar

      I would love for you to write about that! lol

  16. Pam Avatar

    Great tips to help us retire in luxury with less money. I was astounded that the average 401K was only $92K – that’s scary stuff. I also love your motto – never pay retail – it’s my motto too and it’s served us well!

    1. Tricia Snow Avatar

      Right? And the early bird gets the worm. You always spend more when you wait until the last minute!

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