Downsize and Save

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Downsize and Save

Consider a retirement community, which often offers social activities with other retirees.

©iStockphoto.com/rjlevich

Many people buy larger and larger homes over the course of their lives as their families grow and their careers blossom. But by retirement age, your children are probably grown and out of the house. Do you still need a five-bedroom, three-bath with the big, high-maintenance backyard? Even if you don't have a mortgage, you're still paying to heat and cool rooms that probably aren't getting much use and spending both time and money to keep up your home's exterior.

Now is the time to consider scaling back to a smaller house or moving into an apartment, condo or townhouse. An added benefit of some of these options is that you're only responsible for maintaining the interior of your home. No yard to mow, no siding to replace. You may also want to consider living in a retirement community, also called an active-adult community. These communities are planned with amenities to meet the needs of senior citizens. Their amenities may include arts and crafts classes, entertainment, nature trails, golf courses, pools and even on-site medical facilities.

After your house, your car is usually the next major expense. If you have different cars for different purposes, consider whether those cars fit your needs as a retiree. A smaller, more fuel-efficient car could save you a lot of money if you're replacing an eight-passenger van. Even if you just have one car, if it's getting older you may find yourself spending more and more money to maintain it. It may be cheaper in the long run to get a newer car that requires less maintenance but still gets you from point A to point B.

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