Senior savings isn’t something you hear about every day, because retirement finance doesn’t get adequate attention. Money-saving tips are usually reserved for those still working, while seniors are the ones who desperately need them because it’s likely they are living on a fixed income and facing constantly increasing expenses.
The problem is compounded by the fact that most Canadians don’t have enough money in their retirement funds. After retirement, there are few reliable and long-term opportunities to grow their income. So, for retirees on a fixed income, money-saving tips are of the utmost importance. The easiest way for seniors to make their savings go further is to follow the guidance outlined in this article.
Why Doesn’t This Get Adequate Attention?
The topic doesn’t generate media interest for several reasons. First, most people assume that if no one’s complaining, things must be easy for Canadian seniors. This is simply the result of a vicious cycle—low media attention leads to no discussion, which in turn implies a lack of interest.
Second, people believe that with benefits from Old Age Security (OAS), the Canada Pension Plan (CPP), or the Guaranteed Income Supplement (GIS) for seniors with low to moderate income, seniors are well funded. This is misleading, as it must be seen in the context of the overall rise in expenses and the specific needs of senior citizens.
The third reason is that most Canadian retirees who worry about their savings may not share their concerns with their immediate family. This is usually not from embarrassment but out of love—they don’t want to burden their children or grandchildren with their problems.
So stretching your finances is top priority if you’re a Canadian senior citizen. But that doesn’t mean you have to downgrade your lifestyle. Think of these money-saving tips as ideas to get better deals and optimize all aspects of your life. With these tips to increase senior savings, you could improve certain aspects of your life.
8 Ways Seniors Can Save Money
1. Downsize to a Smaller Place
A home isn’t just a financial investment for most people. It’s also an emotional investment. It’s where you raised a family; it’s where you had some of the happiest memories of your life. For your children, it’s where they grew up, and it will always have a special place in their hearts. You may also be in love with the neighbourhood and its amenities. You may consider that an extension of your house.
But your house may have outlived its needs. You don’t need the same space you needed when your children were around. And if you think that you might need the extra space to host your friends once in a while, consider all the costs you’re incurring routinely.
There are property taxes and utility bills that increase according to the size of the property. Do remember that a larger house requires more heating and generates higher bills. Downsizing to a smaller place could be one of the smartest decisions to improve your senior savings—you save on utility bills, property taxes, and any maintenance-related expenses.
2. Find a Place Suited for Your Needs
The next step is to find a place that specifically suits the requirements of senior citizens in Canada. The place you choose shouldn’t be bigger than you need. The decision will be easier once you get rid of all the stuff you don’t want from your earlier place. With only what you need, it will be easier to visualize your new place.
Second, ensure that it’s in proximity to the facilities you may need. These include grocery stores, libraries, and healthcare centres. You shouldn’t have to travel too far.
Third, to the extent possible, get the place checked by a professional electrician or plumber to find out its condition and whether it will need repairs or maintenance. You could also find out the previous utility bills of the place to know whether it’s within your budget.
3. Consider a Reverse Mortgage or Refinance
It may not sound like the ideal option, but it could be the right one for you. If you go for refinancing, the historically low rates should be all the motivation you need. If you opt for a reverse mortgage, despite its occasional bad press, you should know that ownership remains with you, and you would still be living there.
In simplest terms, a reverse mortgage is pretty much like a loan. If you own a home with equity and are 62 or older, you can generally borrow against the value of your home and receive funds as a lump sum, fixed monthly payment, or line of credit.
Unlike a regular mortgage—the type used to buy a home—a reverse mortgage doesn’t require the homeowner to make any loan payments. Instead, the mortgage’s balance, up to a limit, becomes due and payable when the borrower passes away, moves out, or sells the house. A reverse mortgage is a sensible option if you don’t want to move out of your current residence.
4. Review Your Insurance Policies
Your coverage requirements change after retirement, but without realizing it, you could still be paying higher premiums. Reviewing your coverage, reducing it wherever necessary, and getting rid of unneeded insurance are effective ways to save a substantial amount every year.
You don’t need the extra protection you needed when you were working and supporting a family. For example, you may not need disability insurance now. But unless you review your policies, you may not know where you are overpaying. All it takes is a few hours to figure that out and add to those much-needed senior savings.
5. Join The Canadian Association of Retired Persons (CARP)
Among the organizations that consistently fight for the rights of seniors in Canada is CARP. Any Canadian aged 50 and above can join the association. It ensures that you’re a part of a collective exclusively dedicated to the welfare of those like you.
You will get access to senior discounts on travel, restaurants, stores, and hotels. It’s one of the first decisions you should make even before you retire.
6. Supplemental Health Insurance Coverage for Retirees
The medical coverage you get as an employee is highly beneficial, but once you retire, you won’t have access to supplementary health insurance coverage. Of course, some companies do have that for retirees, but usually, you have to opt for one.
What’s important is to understand the kind of additional healthcare you may need. Whether it’s paramedic services, prescriptions, chiropractic needs, or eye care, supplemental health insurance may suit your needs.
7. Take Advantage of Senior Discounts
To find the right discounts, you’ll have to do your research. With the help of friends or other retirees you know, create a list of places that offer senior discounts. These might be restaurants, hotels, travel services, massage parlours, supermarkets, etc.
Along with finding the places, you should also confirm whether they have a particular day of the week with higher discounts that will increase your senior savings. This may require you to adjust your shopping or eating-out routines—you may find it’s better to go out for dinner on a weekday or buy generic brands instead of name brands at the grocery.
Importantly, once you start buying from a certain place, try to stick to it. If you frequent the same restaurant or supermarket, you will likely become eligible for further loyalty discounts. Ask about seasonal sales and whether you might have early access to them.
As discussed above, use your CARP membership to get discounts at places that may not advertise them. If you don’t see a discount advertised, ask—it doesn’t hurt to ask for things that will bolster your senior savings.
8. Spend Smarter
Getting senior discounts is only one way to save during your golden years. There are several other ways to be a smart spender:
- Get rid of your car: You may be spending unnecessarily on car insurance and maintenance when you don’t use the vehicle that much. Use public transport and car aggregators whenever possible.
- Pay annually: Whether it’s insurance, health club, or any subscription service that you use, there could be substantial senior savings if you pay annually rather than monthly.
- Travel together: If planning a holiday, why not go with another couple? That will save on transport, food, and lodging.
- Go during off-peak hours: This is one of the easiest ways to protect your senior savings. Your favourite restaurant or health facility may have discounts for off-peak hours or their slow days. Find out and make the most of those.
Just because you have to watch for opportunities to save money doesn’t mean you are compromising your lifestyle. What you’re doing is being prudent about your expenses. With these tips on cutting down or getting rid of unnecessary expenses and getting better deals, you’ll see a substantial increase in your senior savings.