15 Ways to Live Like a Cheapskate and Retire in Style

Category: Financial and taxes in retirement

February 26, 2013 — If you search on the Internet for “live like a cheapskate” you will strike a frugality bonanza. There are authors like Jeff Yeager who have written best sellers on the subject (“The Cheapskate Next Door”), plus plenty of websites offering their advice. There’s even a TLC show, “Extreme Cheapskates“. Our friend Robert Powell over at MarketWatch had a particularly helpful article earlier this year, “How to Retire Like a Cheapskate and Live Well“. This article will roll up advice from all over into our 15 top tips for living like a cheapskate.

First of all, a little etymology – if you are going to be a cheapskate you might as well understand where the term came from. In fact there is considerable uncertainty about the origin of the word. The main dictionary sites seem to think that “skate” was a late 19th century slangy term for a worn-out horse, to which cheap was added to imply mean or miserly. One Wiki source claims it refers to inexpensive strap-on roller skates; while we acknowledge those were horrible to skate on, we doubt that is the term’s origin.

A Penny Saved…
Benjamin Franklin had it right – a penny saved is one you don’t have to earn. For retirement that means if you can manage to save enough money on your expenses, you can survive – and maybe have enough to indulge in a few luxuries.

Our Top 15 Cheapskate Ideas
Here are some of the best ideas we have heard for saving money in retirement. Our advice is to think about the big things – steps you can take that can deliver serious money. Yes, you can re-use your dental floss and your paper and plastic bags, and you can hard boil your eggs as you run the dishwasher. But some of the steps that extreme cheapskates will do to save a few pennies seem a bit crazy – as in taking the idea so far you get obsessed about it. Here goes:

Move to a smaller house. Real pennypinchers don’t wast money heating/cooling, painting, maintaining, and paying taxes on a house that’s bigger than their needs.
Buy a reliable car, preferably second hand. Buy a basic model, and keep it until big things start breaking on it. If you have 2 cars – get rid of the gas hog.
Move to a less expensive state. Hopefully one with reasonable real estate costs along with lower income and property taxes.
Plan your major purchases in advance. Leo Babauta, author of several books including The Cheapskate Guide) suggests keeping a 30 day list – don’t buy anything until it has been on your list for 30 days. That way you avoid impulse buying, and you have the time to take advantage of deals.
Buy only with cash. People get themselves into the most trouble with credit card-backed, sudden urge purchases. Having to pass over a wad of $50 bills has a powerful way of promoting restraint.
Use cash and get discounts. Retailers hate paying credit card fees out of what they get from a sale. So offer cash; many times you’ll get a discount – if you ask.
Take all available discounts. If you travel, get an AAA card. You’ll usually save 15% on motels. Senior discounts are about everywhere – ask if you don’t see them. If you live in a tourist area ask for the local discount – most places give them. Or, just ask – do you have any discounts – you’ll often be surprised.


Take advantage of free entertainment. Read the newspaper and online guides – you’ll be pleased with how many free (and good) events there are. Many museums have one day a week or month that’s free. Use your DVR to record your favorite TV shows and classic movies – just about every good movie gets on TV someday! Use your library; they have many free and great programs and resources ready for your pleasure.
Manage your communication expenses. Many of us are paying an astounding amount of fees every month for communication and the Internet. Cable TV, Internet access, home telephone, cell telephone, ipad Internet, Netflix, Sirius radio, and more. Most of these have become necessities, but the monthly totals can be amazing. Consider consolidating (get rid of the land line, get a family cell plan, put phone/cable/internet with same supplier). Cancel your cable and watch TV online. Talk on Skype or Facetime. You should be able to be cut something.
Stay healthy. Co-pays, drugs, and other out of pocket expenses can actually drive you into bankruptcy. So save big bucks – get yourself into shape, cut down your vices, take your medicine, and generally take care of yourself.
Travel by bike – or walk. At $4 a gallon every car trip you take costs you money. We guarantee you will enjoy a short bike ride or walk a lot more, and it will be free!
Practice frugal gifting. Think ahead about what gifts you need to purchase in the coming year. Buy when they are on sale, or knit, draw, or build something more meaningful at a fraction of the cost. Last minute excursions to buy gifts almost always cost you more.
Cut smoking, alcohol, and sweets. Besides killing you, the price of a pack of cigarettes is obscene (remember when you could buy a carton for $3?). Cut down or stop your consumption of alcohol and sweets, both of which can turn out to be a pretty big (and unhealthy) part of your budget.
Maintain your stuff. You paid a lot of money for your car and household appliances. Read the manual and take the simple steps they outline to preserve their long life and cut down on repair bills.
Make more money. The corollary to saving money is to make more of it so you have it to spend. Looking for a paying job that is fun or rewarding can give you the wherewithal to have some extra spending fun in your life.

For further reference
The Cheapskate Guide: 50 Tips for Frugal Living

What are your best Cheapskate ideas? Come on now Topretirements members – we bet many of you have some outstanding ideas on how to save money to make the best of retirement. Please share them in the Comments section below.

Posted by Admin on February 26th, 2013

58 Comments »

  1. I have about 30 specific tips for saving money listed in my book. Here are three, briefly summarized:

    1. A number of generic drugs are free at places such as Walmart, Publix, or Meijer. You will still need a prescription from your doc, though.

    2. If you’re 62 or over, purchase a $10 Lifetime Senior Pass that gets you into more than 2,000 federal recreations sites, including National Parks, This is a perk a lot of people don’t know about. The pass covers the car passengers, too. (http://www.nps.gov/findapark/passes.htm)

    3. Do what my kids have done re phones – dump the landline and only use your cell phone. Before you cancel, be sure its cost isn’t bundled in a discounted package with TV or Internet service.

    Jan Cullinane, author, AARP’s The Single Woman’s Guide to Retirement (John Wiley & Sons)

    by Jan Cullinane — February 27, 2013

  2. One of the biggest money savers we have is couponing. My wife is like one of those people (almost) you see on TV on extreme couponing. She will usually save us 50 to 60 percent per trip to the grocery store. Most of the time she matches coupons with items on sale, often getting the items for FREE. We have also built up a significant amount of stores because we take advantage of good deals and stock up on low cost items. :grin:

    by Johnny Jacobs — February 27, 2013

  3. I take exception with your comment that alcohol can be a big and “unhealthy” part of your budget. Most data shows that alcohol in moderation can be very good for your health.

    by Ray Dinsmore — February 27, 2013

  4. I agree that couponing is great but I find unless I exercize restraint, it’s like being at an auction and I wind up buying items that I don’t regularly use because it’s on sale and I have a coupon! I guess I get caught up in the challenge. We do not drink bottled water and that saves a ton of money not to mention all that plastic and the petroleum needed to make it. We shop on days when there’s a senior discount offered at our groceries, department stores and movie theaters. We take advantage of restaurant deals such as Groupon and Restaurant.com when we eat out which isn’t more than twice a month unless it’s a special occasion. And contrary to the suggestion of paying with cash, we use one credit card for everything, pay it off monthly and use the points we accumulate for yearly travel. It works great if you have some ability to control your spending. I can understand the issue of not thinking of plastic as real money!

    by cherie — February 27, 2013

  5. For years I lived the cheapskate life. This helped me semi-retire at the age 40 when my net worth was minus $30,000. (I had no assets and had $30,000 in student loans.) Living the cheapskate way allowed me to save 30 to 50 percent of my income when I started making decent money.

    I can add many other ways to save money. Nonetheless, the one from the list of 15 that resonates with me is Number 15: “Make more money.”

    Now that I earn a better income than 90 percent of the population by still being semi-retired and only working 4 or 5 hours a day (like I always have), I take great pleasure in not having to live the cheapskate way. For example, I love flying Executive class, which I have done to Toronto, London, New York, and Istanbul. (As Cherie above, I use my Visa Aeroplan card to accumulate Aeroplan miles and always pay off my Visa bills at the end of the month.)

    Insofar as leaving money too heirs, these two quotations apply:

    “Leaving your heirs a lot of money doesn’t guarantee tears at your funeral.”
    — Sandra Block

    “If you want him to mourn, you had best leave him nothing.”
    — Martial

    In the end, there is only one purpose for money — and that it is to spend it. Of course, you must be creative and industrious enough to earn enough money to joyfully spend it in pleasurable ways.

    Ernie J. Zelinski
    Author –
    “Helping Adventurous Souls Live Prosperous and Free”
    Author of the Bestseller “How to Retire Happy, Wild, and Free”
    (Over 175,000 copies sold and published in 9 languages)

    by Ernie Zelinski — February 27, 2013

  6. Everyone is different. I follow strict health and fitness protocols but enjoy a glass of wine with dinner. Where I live it is as reasonable as any other type of beverage with dinner and is what I want. Cut up Credit cards? Really? People looking at these comments I would give more credit to than being that reckless with their spending. I always use credit cards for purchases when I can and have one for gasoline, one for meals (and wine) out, one for travel and one for everything else. The reason? I get 2% cash back on the one for everything else and 3% to 5% with the other cards in cash back.

    by High Yield Consultant — February 27, 2013

  7. As High Yield Consultant said, everyone is different. Reading some of the ways to save are a combination of common sense and “you’ve got to be kidding”.

    My biggest expense is the maintenance on my house. Every year I have had to replace something major like roof, flooring, appliance (s), heating and air system and have the foundation raised and leveled due to dry and shifting ground 3 times. I am so looking forward to selling and moving into a senior complex. Having to shell out $10K to $20K annually just to maintain is no fun.

    We use credit cards for everything we can, pay them in full every month, and get the cash back which is used when we take a trip or cruise for “frivolous fun” stuff. We both work part-time to earn “fun money” so we can take the trips and cruises. We don’t drink or smoke. We do eat out a lot as we have found it is more economical FOR US as we use Groupons and coupons 90% of the time. If I buy groceries and cook, half ends up getting thrown out. On an average, we spend $20-$25 per meal out and it serves us for 2 or 3 meals as we never can eat a full meal. We no longer buy stuff for the house as when we sell, will be getting rid of a lot of what we have. We no longer buy clothes or shoes as we have more than enough.

    If you want to travel and enjoy life when you retire, you will find a way to do it. When I say this, it is assuming you are in relatively good health, as we are. I can’t comment on how it would be with health problems. I am 75 and he is 66 so we are not “young” retirees but are fortunate enough to be rather healthy.

    by Joanne Hice — February 27, 2013

  8. Two thoughts on how to save money:

    1.Entertain at home! People have gotten into the habit of eating out, often because they were too busy while managing a career to cook more than a simple meal. Now that you are retired and have more time,invite friends over for dinner and a game of Bananagrams, or another fun game. Most of your guests will ask, “What can I bring?” Take them up on the offer to share both the time it takes to prepare a meal and the costs. You’ll find that eating at home costs less, is fun to do, usually means tasty-left-overs, and generates return invitations.

    2. Stop going to Dunkin’ Donuts or Starbucks every day. Coffee is ridiculously easy to make at home. If you do the simple math, you find that a four-dollar-a-day coffee habit translates to $1460 a year!

    by Patricia Kennedy — February 28, 2013

  9. I notice that many of the people posting here are ‘making a case’ for the lifestyle choices they make, and explaining why it works for them. The suggestions above are suggestions that you can follow, or not. I don’t believe that eating out is ever cheaper than eating at home, but who cares? It’s your money. I think the important thing here is to offer ideas that some people may learn from, or be inspired by.

    by Ginger — February 28, 2013

  10. Since I retired I have cut my expenses by 50 % with out much change in my life-style.
    1. I watch every penny….now I don’t spend mindlessly.
    2. I shop for food and anything else once a month.
    3. I look for alternatives. For example, I take out ebooks from the library.
    4. I am in the process of creating a pet-care co-op so that I don’t have to spend money for
    my cats when I travel short-term.
    It is a rewarding challenge!

    by LuluM — March 1, 2013

  11. Lulu,
    how does that once a month food shopping work out for fresh foods? Are you doing that to save on gas or save on food?

    by Elaine — March 2, 2013

  12. I do live in one of the most expensive states in the country (Ct.) so it’s very difficult to be thrifty. I know that I’m spending less that I did while still working but I still find it very hard to be as frugal as I think I should be. Hard to get over the old habit of buying what you want when you want it as I could when I was still working.
    Should definitely move to less expensive state but because I am a widow + it’s scary to think of moving to a new location where you know no one. Yes, I can and would make new friends but what do you do in the meantime.?
    Two sons live in Huntsville, Al. We do have a good relationship and they have encouraged me to move there but I sure don’t care for that VERY humid climate. I do tend to be an outdoors person except when the temp reaches 90 and the humidity is about the same.

    by Anne — March 2, 2013

  13. I just retired and we are planning to sell our Arizona home and move to a more tax friendly state. Currently looking at Alabama and Tennessee. Tennessee does not have income tax but the property taxes can be high. Alabama does not tax defined retirement income but 401K distributions are taxable and after age 65 no state property taxes.
    Use your credit card to get cash back but always pay the balance when due. You use the money for up to a month free.
    Buy a well built vehicle and keep it. We own a 2002 Corolla we bought new, It now has 180,000 miles and gets up to 40 MPG. I maintain the car myself.

    by Just Retired — March 4, 2013

  14. We grow our own veggies in the summer, then can the surplus for winter.
    We heat with wood from free, downed trees.
    Hubby makes his own beer & wine, and we buy eggs & meat from a farmer down the road.
    No expensive fancy smart (or dumb) cell phones, but we do have internet connection. Landline phone only is much cheaper than your I phones. Come on people, we grew up without cell phones!
    Unfortunately, a big chunk of my money must be spent on expensive health insurance.
    Clothing? There is a Salvation Army store in a near-by city!
    But we do have money for travel, maybe once a year, and that makes up for all the chopping of wood, and long johns in the house…. just the thought of those white beaches & palm trees & blue water.

    by Marge — March 20, 2013

  15. Marge – At last! We have found another kindred couple!!! We do have cell phones … only for emergencies when on road … I used to have a 65 mile commute (each way) … through Appalachians in winter! They’re “dumb” Tracphones. If one economizes other ways, you can find funds often available for trips now and then, etc. I would still be using FREE dial-up access from our library … if wife hadn’t finally revolted (I would just it with a magazine, a book, or the paper as each page would load ;-) ). Heck, even dropped my beloved Netflix a while back for free DVDs from our library. Loved Netflix because they had all these great British TV series and films that I love. No cable or other regular TV. We love to bike and walk/hike together. Our comfort bikes (after years of trying to strain our necks on cheap mountain bikes) was one of the best investments we ever made … made bike riding a real joy (we ride flat rails-to-trails). Life can be so wonderful from just the simple pleasures.

    by Mad Monk — March 21, 2013

  16. Monk— Maybe we were Amish in our last lives……
    and maybe we will be Amish in our next lives!

    by Marge — March 21, 2013

  17. I and my husband are proud “cheapskate” (especially my husband; I am recent convert). We are not extremists (no, we don’t wash paper towel to reuse), but already done most of 50 tips. We still use credit cards (with rewards, and pay on-time), and use cell phones (hubby has pay-as-you-go for emergency, I have smart phone $25 month unlimited date plan without contract). An only concern for us is health insurance because of my husband’s diabetes. Right now, we are semi-retired and getting insurance through my husband’s job and soon he wants to fully-retried. He is too young for Medicare yet. (He is 60 now). We are already using Wal-Mart for drugs. Does anyone have any suggestions? Do you think Obama care will help us?

    by Francesca from NY — March 22, 2013

  18. Francesca from NY, you might look into Jans Drugs in Canada, from my understanding some people save over a few thousand a year.

    by CB — March 22, 2013

  19. people! watch your money because its important as we age to be independent but!!!!!!! dont live a sick lifestyle by going trough life avoiding pleasures because you have become mentally ill focused on nothing but not spending money.

    by tom — March 22, 2013

  20. Thank you CB. We will check it out.
    To Tom, I don’t believe we live “sick lifestyle”. Trust me, we enjoy our lives without spend ton of money. We enjoy movies (Free movie every Tuesday from Optimum reward)dinning (use Groupons to try out new places) and go to vacations (use AAA and find great deals)…etc. I love cooking so we splurge cooking gadgets and ingredients, but most of the time I can whip up a good, healthy meal from something on sale. I bake my desert because my hubby is diabetic. Once I was workaholic, working long hours, making a lot of money, and buying and doing anything I wanted but I was not happy; I just filled my void with things I did not need. Now I am much happier!!

    by Francesca from NY — March 23, 2013

  21. Good for you Francesca!

    by Stacey — March 23, 2013

  22. Francesca would you share where you live cheaply in New York I have to leave due to taxes. I’m in Westchester county.

    by RUBYTUESDAY — March 23, 2013

  23. RUBYTUESDAY, we live in Westchester, too!! I totally agree, taxes are brutal. If we don’t live here, we could have gone one more vacation a year. We are in process of selling our home here and move to either Delaware of North Carolina, so that my husband can fully retire. Where are you moving to?

    by Francesca from NY — March 24, 2013

  24. Francesca, One week its Florida next week it’s Delaware, North Carolina, South Carolina get the picture? LOL.. the more I read this board the more I feel that I should stay put until either I die or I’m a widow. I think I will put in a new driveway after I have the fence fixed and when everything turns green and pretty I will stay put. If I become a widow it will be a no brainer I will move myself to a small place like SPRINGVALE apts in Croton where I live now.

    by RUBYTUESDAY — March 24, 2013

  25. I live in NYC, a coop in Brooklyn. The neighborhood has seriously changed and I feel live a stranger in a strange land. I’m also so tired of the weather. I still have a good 4 years before I retire. A good friend and I (we’re both divorced) are looking at Sarasota, FL, Asheville, NC or Athens, GA. We realize no place is perfect including where we are now. We put our “must haves” together and came up with those three places. We need to be in a more liberal environment that has theatre, museums, educational opportunities…anyway, you get the picture. Any suggestions would be greatly appreciated.

    by Stacey — March 24, 2013

  26. I hear you, RUBYTUESDAY. Same here. We are looking into Delaware because of better Tax, so that our savings and 401K etc will last longer. ( I will still work part-time because I love my profession).BUT houses are pricy. We are planning to visit Delaware next month. Stacey, have you ever visited these places? You must. …and no place is perfect. What about the Triangle area in NC? We have a friend there and we visited several times. We are most likely rent before we buy anything.

    by Francesca from NY — March 25, 2013

  27. Francesca good luck with the sale of your house it’s the best time of the year to sell no leaves, parents planning for schooling etc. Keep us informed about Delaware places that you are seriously considering.After reading about the 85yr old that was so good naturedly giving two teens a ride I’d stay out of Lincoln..

    by RUBYTUESDAY — March 25, 2013

  28. Francesca: We are planning to visit each one. Still don’t know where we’ll wind up. Thought about Delaware since I’m in NY and she’s in VA. Only problem I have is the weather in the winter. We also plan to check out the triangle area in NC. Thanks for your suggestions.

    by Stacey — March 25, 2013

  29. I am a bit late….but to “Just Retired” from a post dated March 4th. How come you call Arizona “not tax friendly”? You actually said you wanted to move from Arizona to a more tax friendly state.
    I always see AZ listed in the most tax friendly list of states, even in lists of the 10 most tax friendly states. Within the next 16 months we will hopefully move from Illinois to AZ. Your tax friendly comment won’t change my plans…..but I am curious….want am I missing about taxation in AZ?
    :shock:

    by David Coughlin — March 26, 2013

  30. Stacey: You are right about Delaware. Going back to the topic of this blog, we need fewer clothes if we live in warmer states!! Right now, I don’t own many clothes; after I finished working in NYC I sold most of my fancy clothes at eBay, kept only basics for my part-time work. I hope I can get rid of all heavy winter coats and show shovels!! RUBYTUESDAY, we are concern about crime rate in Delaware, too. I will keep you posted.

    by Francesca from NY — March 27, 2013

  31. Re: Cheapskate
    I too find that I have been doing most of these for years. My kids used to laugh at me for washing plastic bags (which I almost never buy). Now they wash bags and call it recycling. But as I age, or get lazy, as so many say, there are life style choices. I do not want to count every penny. I do not usually use coupons as they take so much time to compare, get right size and item. I may have more time but I also have less energy. I choose to buy local food, after trying to garden for years. It may be more expensive, but I feel I am helping the local economy and I do not have to worry about “pink slime” in my local meat. Americans spend less % of our income on food than many companies and do it by eating cheap empty food.

    Eating out is not important to me except for special occasions. I do not golf or have a boat, or go bowling or play cards. There are plenty of volunteer opportunities for activity and fellowship, and you are making a contribution.

    by Moving South — March 27, 2013

  32. Correction to Cheapskate. I meant other countries spend larger % of income on food, not companies.

    by Moving South — March 27, 2013

  33. To David Coughin, I agree that AZ is a tax friendly state. I have found this site to be most useful in exploring the tax impact state by state.
    http://www.kiplinger.com/tool/retirement/T055-S001-state-by-state-guide-to-taxes-on-retirees/index.php
    The one thing I have been told a number of times from Real Estate Agents while looking in the Sedona Area/Prescott, is that a major problem in the future for Arizona will be accessibility to water. Supposedly the majority of water that flows through AZ is water that has ‘rights’ for use in CA and therefore future water prices in AZ can expect to seriously increase. Maybe on par with what our rising health care costs will be.
    I’ve lived in the SF Bay Area and experienced how your rate increases as the elevation of your property above sea level increases, a $200-$300 quarterly bill was not unusual for 2 people. Summer posed a special problem because once the lawn sprinklers were started up your bill could be $500/600 quarter. And if you live in a planned community with HOA’s you either paid the higher water bills to abide by the by laws of keeping your lawn green, or faced the HOA’s monthly fines!
    Living in NY now and being gouged by the local water utilities here, along with years of lower reservoir water levels despite ample hurricanes and snow storms, I can only imagine what expenses will be in an arid climate. :cry:
    Maybe a property with it’s own well is the way to go? Good Luck with your search :wink:

    by Jane — March 28, 2013

  34. If you have high speed Internet anyway, you might look at Ooma for your home phone solution. I’m getting ready to retire in 2 months and I’ve gone from about $55.00 monthly for AT&T and long distance down to $3.84 monthly. You do have about $170 initial cost but that pay back is quick.

    by Doug — April 10, 2013

  35. As a sungle mother of two wonderful children (now in college) I always had to watch my income versus cost of living. I have used coupons, buy one get one free offers, and other discounts. I have always used credit cards to be paid off when the statement arrived and therefore was able to use the reward points to take my children on a vacation. We sporadicaly splurged going to a movie but went on there weekly family dsy and spend less than 10 dollars for the three of us (ticket, popcorn, and drink included) Cooking and baking at home not only was cheaper but also provided us with family time and taught my children to be self sufficienced in college. They themselfes now use coupons etc. as it was part of live growing up. We had to (and still have to live) in a shoestring budget but we never felt on missing out on anything at all as LOVE FOR EACH OTHER was always the most priceless item. My conclusion is that the living a frugile lifestyle has a different meaning for everyone as is the way in which togo about it. There are so many suggestions out there and my best advice is : take what you need and leave the rest, find ways which fit your comfort level the best.

    by Petra — November 19, 2013

  36. High Yield Consultant is right-everyone is different. I consider myself careful not frugal, and pay little attention to the marketing media. Successful retirement is NOT only living frugally, it takes PLANNING for the entire journey to make it successful. I am 17 months from retirement, currently earning a very good wage. My goal is to be 100% debt free within that 17 month window, and I am perfectly on track to get there before the 17 months is up. I use credit cards for EVERYTHING, pay the balance off each month, and get the benefit of 2% cash back for everything I buy, which I apply to the credit card bill. I use coupons and Groupon when it makes sense to do so.

    My home was paid off this past July, but I pulled some equity to maintain a tax deduction and used that equity to pay off my car and the balance on a small HELOC. I am paying 7+ mortgage payments per month to wipe out the remaining debt I have within that 17 month window. I enjoy fine wines, good food, a nice luxury car, eating out, staying as fit and healthy as possible, and having a safe, nice place to live. With the elimination of ALL my debt, I’m quite certain I will continue to enjoy all of those things after I retire, with money left over for many other things. My retirement investments are now guaranteed principal retention and are NOT in the stock market, earning a very nice interest rate. I do contribute to a 401K, but only to get the 50% employer match. It all took some planning, but…with the establishment of a goal, the help of a good financial planner, and a ‘pay me first’ approach, I’m doing OK. I also eliminated the biggest source of debt I’ve ever had-my now ex-husband. No fooling. That divorce forced me to start my life completely over 11 years ago. I dropped over $100,000/year out of my income stream and had more leisure cash than I knew what to do with.

    I now own my own home (a small mortgage is well on the way to a zero balance), have zero credit card debt, have all the relocation expenses and divorce expenses paid in full, and own a late model Lexus outright, complete with valet service and all the maintenance paid in full to 125,000 miles (it has about 50,000 now), and enjoy the things I like. I am now looking to buy land and build a cabin in north GA, and should be able to re-qualify as a first time homebuyer again, perhaps taking advantage of the discounts etc. even though I will pay off the package in full. In GA I won’t have to pay any school taxes once I am 65 yrs old (retirees pay only the ad valorem property taxes, and more tax law changes are in the works in GA, many beneficial to retirees). This move will be lateral-I will have no mortgage on either the land or the home. I also won’t be taxed for retirement income or social security income in GA, hence the relocation from central FL which does not offer much for retirees in the way of property taxes, and, since there is NO income tax in FL, the tax revenue is generated in other ways. I plan to work enough at something to stay below the radar of the feds (I must pay taxes on my social security if I earn over the federal wage threshold before my full retirement age), and also plan to draw on my ex husband’s social security first in order to let mine grow until full retirement age. I am negotiating a contract with my present employer to work part time for a year after I retire in March 2016, and will include the cost of my health care in that contract. The earnings from that contract, if it comes to fruition, will be run through my small corporation so as to be able to earn more than the federal wage threshold without all the income being charged directly to me and deemed taxable. I will also use my travel to/from the plant location, my computer expenses, office supplies, etc. as corporate deductions against that income. I think I’ll be just fine financially, but…the planning for this started many years ago. Also, I have no children, so I won’t leave a legacy to anyone.

    None of this happens overnight, and much of this hinges on maintaining my health for a good long time. Anyone CAN do what I did, but you must have a comfort level with it to maintain it long enough to benefit. With my current situation, I am living quite nicely now on way less money than I will get from social security alone, before I earn any money working or draw on my retirement investments, and I’m not missing a thing. The only thing I am missing is being 100% debt free and retired…but, all good things take time, eh:) AND: important for many out there, I do NOT have one of those million dollar retirement accounts that I am being told we all need in order to retire successfully-I am doing this on a very small fraction of that amount.

    Nonetheless, I plan to enjoy every moment of this journey into retirement, without changing much if any of my lifestyle as it is now, but I will have complete debt freedom and financial comfort!

    by Carol — November 3, 2014

  37. Hi Carol:

    Just curious, where are you looking to build in north Georgia and will it then be your primary residence?

    Thanks,
    Jennifer

    by Jennifer — November 4, 2014

  38. HI Jennifer,

    GA will be my only residence. I am looking at northeast GA, possibly Blue Ridge, Ellijay, Dahlonega, Toccoa, etc…lots of little mountain style towns up there. I have family in Marietta, friends in Asheville and Maggie Valley NC, and a couple of airports not too far away.

    I will use the cash from the sale of my current home in FL to move into my next home. I am not in the financial position to own 2 homes, nor do I wish to maintain them:) A bit of laziness in my old age I guess:)

    After living in FL for 33 years, I am tired of the heat and humidity…need a little bit of a change!

    Enjoy,
    Carol

    by Carol — November 5, 2014

  39. My Hub is retiring in March of next year. He will be 63. We are trying to find all the in’s and out’s of Social Security (SS) and there are a lot of rules. I just found this out today. I know the SS income limit for him will be $15,720 because he has not reached full retirement age (FRA). But what I didn’t know is that all income is included in the SS earnings test including contributions to a 401k!!! So that changes when he will actually retire. He will have to leave earlier to avoid making more than the income limit and paying $1 for every two dollars earned.

    Another thing I just learned is that no taxes are taken out of SS checks but you can voluntarily have them taken out if you choose to. The article below is old but I am certain it still holds true.
    http://www.aarp.org/work/social-security/info-05-2011/social-security-earnings-test.html

    by Louise — November 6, 2014

  40. Louise–That’s a healthy deferral into a 401K. Maybe he should continue working and not start collecting benefits….his benefits will grow until he reached full retirement age, and he is making at least 50% on his deferrals if his employer matches. Also, do YOU have any social security benefits-are you working still? If you have benefits available to you, maybe it’s smart to opt for yours first, allowing his to grow while you both use yours to live. Just a thought. Also, re-check the info in that article, it may have changed since 2011, I am not sure. I am the sole source of income for my household, so it is only me. I’ve retained a financial planner to help me maximize social security benefits because I am eligible for spousal benefits, which becomes quite interesting:) There are so many options it’s crazy…please try to get more info about this, and share if you will….would be interesting to see how those 401K deferrals really work out. Good luck-have a great day!

    by Carol — November 6, 2014

  41. Louise- Carol’s comments make a lot of sense. If you havent seen it already, don’t miss our 3 part series on Social Security. Answers most of the questions you have, plus.

    Part 1 – http://www.topretirements.com/blog/financial/what-you-think-you-know-about-social-security-could-hurt-you-part-1.html/

    by Admin — November 6, 2014

  42. We save money by taking the train, AMTRAK, when possible. We live in Winter Haven Florida between Orlando and Tampa and are fortunate to have AMTRAK Silver Service both North and South twice a day with the route extending from New York City to Orlando. It is not commuter service but great for distance travel along that route. It can be a frugal move if you live near a train station. We have taken trips to Ft. Lauderdale, Miami (including right to the airport there) and going North to Savannah and Charleston SC. You eliminate problems with having a car. If you get the train tickets a few weks in advance you can save big money. price is sales capacity controlled. Big discounds for AAA members, Seniors etc. You can bring lots of luggage and bring it aboard without extra charges. There is lots of seat and leg room on the train, seats recline and foot rests are there, wifi pretty reliable, The silver service trains we use have snack cars and regular plush dining cars as well with good food and service. You can sleep at your seat. bring a small blanket or you can take a room or roomette. The rooms are not for the frugal traveler if you are on overnight and frugal you can make sleeping in the reclined seat work for you. AMTRAK also has one, two and four week passes at a savings. you plan your route, make stopovers when you want and even can get to national parks or across the country. You avoid airports, security and extra charges you face with airport and plane travel. They are also more likely to get there if the weather isn’t the best. On time schedules have been vastly improved. To be frugal consider long distance train if you are lucky to live near a train station as we do in Winter Haven FL.

    by David M. Lane — November 6, 2014

  43. David, you mentioned you can take a lot of luggage without fees. What kind of transportation is available at the destinations to deal with that luggage?

    by EMA — November 7, 2014

  44. Carol, why do you like these small towns in Northern Ga. We are searching for some place to move and do not want to go back to Fl but need an affordable home, low RE taxes and a place in which they do not tax SS. Also need to be close to medical facilities – wife is a breast cancer survivor.

    by Robert — November 8, 2014

  45. Robert – one thing I found out about Ga (we are looking there also) the Ga state tax if you are over 65 the first $65,000 of income is not taxed and the northern part has many lakes and small mountains and beautiful scenery if you like the outdoors. We visited the Dahlonega area and liked it. I emailed the state taxation division and they sent me a lot of information. There are many larger municipalities that have excellent medical facilities but the more rural and cheaper areas you will need to travel some. My wife’s mother is in a nursing home in Buckhead out side Atlanta so we are looking to be within 60-90 miles of her.

    by Jeffrey Gilfoy — November 8, 2014

  46. reply to EMA, regarding luggage handling on AMTRAK distance trains. train stations that handle luggage may have different procedures. You can take some luggage on board with you and larger pieces can be checked. The stations have porters/staff to assist with loading, unloading and checking. There is a time cut off on checking luggage. You might want to arrange for a taxi or car service with a van if you or your traveling group has lots of luggage. check on AMTRAK website for information on requirements for each train. You will need to study the train schedules to understand and be in compliance. It is different from airport travel. Some people arrange for car rental which can be done in advance. Be sure to check arrival time of the train if you are going to arrange for a rental car. Train arrivals are not always during working hours. It is amazing what you can learn on the web about your destination cities! Hope that helps!

    by David M. Lane — November 8, 2014

  47. Robert and Jeffrey,
    I’m pretty sure that amount is doubled for married couples. That would bring it to $130,00 tax free. Sweet!

    by ella — November 8, 2014

  48. Jeffery – Ahhhhhhhh, wouldn’t that be nice in our retirement to earn $65,000 a year!! We are no where near that – 2008 really hit us hard. Lost a bundle. Anyhow – thanks Jeffery for your input. We are also looking at Johnson city in NE TN and Conway, SC (Really low RE taxes and they do not tax our SS!). For A small (downsizing)home of around $100,000 the RE taxes in both places would be somewhere in the vicinity of $500.00 a year! Datsa Nice.

    by Robert — November 9, 2014

  49. Jeffery, BTW did you ever check out or been to “Blue Ridge” North Ga? Heard it was pretty nice but may be to rural – not sure.

    Robert

    by Robert — November 9, 2014

  50. Oops, just came across this and it should/might be of interest to EVERYONE (?), Enjoy = (you may have to Copy and Paste).

    How tax friendly is You State?

    http://money.cnn.com/pf/features/lists/taxesbystate2005/index.html

    by Robert — November 9, 2014

  51. Thanks, Robert. I love this type of information. The challenge here is that the tax breaks for seniors are not included. And property tax can also be a large expense and can vary by where in the state you live. Of course taxes can change. That said it is information and that is always good.

    by Elaine — November 9, 2014

  52. Not sure if I misunderstood Carole’s comments but the total income for 2015 including 401k contributions cannot exceed $15,720 if you have not reached full retirement age. So if he were to contribute $3,000 in 3 months time into 401k the most he can make to stay after in the guidelines of income of $15,720 would be $14,205. Deferred income into a 401k is considered income.

    We have consulted our Financial Advisor and she is pulling it all together for us. Tomorrow I am signing papers for her to pull money out so it is liquid and investing the other portion in other ways to grow it more.

    This year will be a financial hodgepodge for sure. Hub will work 3 months and then collect 9 months SS. I am eligible to collect in SS in September so I will have 4 months SS. He has a small pension from a previous job. I have an inherited IRA that I can draw a little each year. We have IRA’s, 401k’s. I am not working and have not for almost 4 years since I was laid off and TOO OLD to find a decent job.

    Hub needs to retire. He is burned out and we can afford it but it is an interesting journey to find out what you are entitled too including Obama care. I contacted an insurance agent and if we can stay below $62,040 we will have to pay $7,000 for ‘affordable’ health insurance and still get credits, if we go over by one dollar it jumps to $9,000 a year and no credits at all.

    So the journey to retirement continues.

    Hub will be on Obamacare for 2 years then off to Medicare. I will have to be on it 3 years 5 months.

    by Louise — November 9, 2014

  53. I was wondering if anyone in this group is on Obamacare? Would like to hear from those that are and find out how the insurance is working for them.

    I also read that a LOT of people are going to be in for a rude awakening when they do their taxes and find that their income exceeds the $62,040 limit. They will have to pay back the credits! People had to estimate their income to get the credits and if it went over the limit the government will demand it back! The insurance agent I talked to said you could contribute to an IRA to lower you income. Ugh, SOOOO many RULES!

    by Louise — November 9, 2014

  54. Thanks, David Lane for the info on luggage situation with Amtrak. Once I am settled I may look into this. Of course, I haven’t yet decided where I will settle.

    by Elaine — November 9, 2014

  55. Robert–after visiting friends in NC, and driving through north GA several times, I fell in love with the scenery, the climate, and the style of homes up there. I am in the Melbourne FL area, have been since 1994, and lived in Pensacola FL before that for 13 years. I am tired of the heat and palm trees (am originally from Long Island), the hurricanes, and the beach that I never go to. The central FL area Is close to medical facilities, but the really good facilites are the Orlando medical centers, Shands to the north of us, and the Tampa facilities to the west of us. FYI the Lee Moffett Center in Tampa is one of the top cancer centers around. Here in FL it’s the only state I am aware of that own the hospitals, the doctors, and provide the health insurance, which we are now discovering is only good in FL. I have always made my home my haven, and I have to love where I live. If I move to north GA, I am about 2 hours out of Atlanta, about 2-3 hours out of Chattanooga, and there are medical facilities that accept Medicare patients in the towns of Blue Ridge and Ellijay at least. I have not investigated Blairsville, it is way up in the northeast corner of GA…but it too, is not far from Chattanooga or Atlanta. So, if I relocate to north GA, I am sort of in the same boat that I am here in central FL-yes, I have medical facilities but the really good ones are not in my town:) Enjoy!

    by Carol — November 13, 2014

  56. Louise I don’t envy you. I may not have written my comment well, but yes, the total income you can earn over SS is $15,720 under full retirement age. Over full retirement age you can earn whatever you like, but you will be taxed! I am retiring in 17 months, and like you are treading on ground I’ve never walked on before. I have spousal SS benefits, and I want to take advantage of those…but…I also need to work just a wee bit longer, once I officially retire from my full time job. I found Obamacare to be the least friendly toward folks our age. My planner is helping me maximize my SS benefits and minimize my taxes. I also have a small corporation..I think that may help me if I decide to continue working after I retire in Mar 2016. I can work for my corp as a contractor, take out only enough to stay below the $15,270 limit, enjoy the pre-tax dollar tax benefits, and leave the rest in the corp until after I stop working. I can also collect spousal benefits during that time. My big hurdle will be healthcare, I have it now thru my employer. At age 63-1/2 when I retire, I am too young for Medicare and too rich for Obamacare subsidies–YIKES! And many retirees are amongst America’s poor…..But I shall enjoy nonetheless….always something new to learn, eh? Have a great day!

    by Carol — November 13, 2014

  57. Hi Carol,
    For some reason, i am very drawn to the area of Georgia you’ve mentioned although i’ve never been there. (I’m planning a trip this spring.) Can you tell me why you prefer it to North Carolina and Eastern Tennessee? Also, i’m considering (?) a community in the Jasper/Marble Hill area. It’s about 45 miles south of Blue Ridge. Have you been to that area and how does it compare to the areas you’ve mentioned? By the way, did you know that Blairsville supposedly has excellent medical facilities?
    Many, many thanks!

    by ella — November 14, 2014

  58. After much investigation (yes, its beautiful especially by the Smokies)we ruled out NC because of RE taxes.

    Just something to consider. Property taxes are a major concern for us. Most (not all) States do not tax our SS = WHEW -Thank God. Not sure about Ga – never gave it much consieration. We are now focusing on SC, Myrtle Beach and Conway area.

    Buon Fortuna.

    by Robert — November 15, 2014

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