Recently I reviewed an excellent book on financial planning for retirement. I’m reviewing a second book because it approaches this topic from a different angle. While the first book provides great strategies on how to plan and invest for retirement, this book How to Retire the Cheapskate Way by Jeff Yeager discusses how to save money by spending less and calculating your actual retirement living expenses, so you can retire earlier.
It seems the common advice is to save enough for retirement so that you have about 70 to 80% of your current salary to live on in your retirement years. Yeager questions this assumption by advising readers to carefully track their spending to figure out exactly what their actual living costs are and then do retirement projections from there. Living costs may actually decrease in retirement. Mortgages may be paid off, work-related commuting costs and lunches out end, and there is no need to buy and maintain a wardrobe for work. He includes a US Department of Labor Statistics Consumer Expenditure Survey from 2010 (page 68) that shows spending decreases by 45% between our peak spending years ages 45 to 54 and age 75+.
An important cost in retirement is health insurance and there is an entire chapter dedicated to various healthcare options. He also covers 50 ways to save money for retirement as well as low-cost entrepreneurial ventures to generate retirement income – like a private tutoring or pet sitting service. Yeager’s book is both practical and highly entertaining as he sprinkles in stories of how individuals retired early and lived a frugal and happy lifestyle. Even for those not yet thinking about retirement planning, this book is full of helpful money-saving strategies well-worth reading.
Written by Senior Career Services Director Lisa Cook