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How to Retire in Style and on a Budget

Category: Financial and taxes in retirement

Let’s just say that Plan A for your retirement didn’t quite work out the way it was supposed to do. Whatever the reasons, the fact is you are a 60-something baby boomer looking to retire on a lot less money than you thought you would have. Luckily for gritty you, sulking is not an option. Here are 10 of our best ideas on what you can do to retire in style – and on a budget.
1. Move, now. Most people about to retire are living in a lot more house than they really need. So downsizing, the sooner the better, is the smart move. You’ll end up paying less in taxes, utilities, and maintenance right away. But you say the market for your home is terrible? It is, but this works two ways – you’ll get less for your current house than at the peak but you’ll be able to replace it with a steal. By selling your suburban home in the northeast or rust belt you might be getting out when the getting is good, while setting yourself up for possible sun belt real estate appreciation.

2. Look for low cost housing areas. Up until a year ago we would caution anyone to move away from the coasts to get a good deal in real estate. In Tennessee, Kentucky, Oklahoma, Alabama, Texas, and Mississippi you can usually pick out a very nice home or condo in a desirable area for less than $100,000. While it is still almost always true that real estate more than 50 miles away from a coast is less expensive, the real estate melt down has created opportunity in south Florida, the southeast, and Arizona. There are some really nice homes in the Fort Myers and Miami areas going for unbelievable prices (the median was $92,000 in October, 2009). For recommendations on low cost housing towns at Topretirements use our free Retirement Ranger (just specify lower than average cost of living when you take the quiz).

3. Look for a short sale or foreclosure. While not for the faint of heart, short sales and foreclosures offer the potential for huge savings (the National Association of Realtors says they typically sell for 15 to 20% less). They are the big reason why real estate prices are so low – other types of sellers just can’t compete with these sales. To succeed you need to be smart and energetic. You need to have a good real estate agent with expertise in short sales and foreclosures. You also have to use common sense. To find good deals spend time cultivating banks, checking out neighborhoods, and talking with residents (See NY Times article about the Cape Coral, FL real estate market, where over one fourth of the homes have been foreclosed). Many experts advise individuals from buying at auction because of the risks, which can include faulty title. In south Florida you can even go on foreclosure tours as a way to find properties. Just be careful, you are usually buying a home “as-is” with no recourse. (see foreclosure resources at bottom).

4. Look for a resale. Many marketers of new 55+ communities have a lot of unwelcome competition in their own projects – previous buyers who want to sell their units. You can almost always pick up a unit for less than a brand new one. You might not get to specify all of your personal touches, but you will probably get many custom features at no or low cost, with the bugs worked out.

5. Consider moving abroad. This plan is not for everyone. But if you like learning foreign languages and customs, don’t need to frequently visit friends or family, and are up for adventure, an expatriate retirement might be for you. Mexico, Guatamala, Costa Rica, Ecuador, Panama, and Nicaragua all have very desirable and safe towns where the almighty dollar actually still has some purchasing power (see our Directory of Active Adult Communities).

6. Go with a manufactured home. Prices are generally much lower in communities of manufactured homes. You won’t live in fancy architecture, but you will generally get a well-built, comfortable home for fewer dollars.

7. Look for a cooperative community. Florida, California, and Arizona are filled with cooperatively owned active adult communities. These are places where the developer long ago sold all of the lots and built all possible homes. Now the community is owned and run by the residents, who generally try to keep expenses (dues/HOA fees) low and services efficient. With the housing market down, resales are almost always available at a good price.

8. Get creative. There are lots of ways to lead the good life without paying top dollar. Buy a 2nd hand mobile home (or boat) and move south in the summer. If you live in a desirable place, swap or rent your home during the season and go on vacation. Swap your handyman skills for lower rent. Talk with everybody you know, read, and look online for different ideas.

9. Keep working. If you have a good job and you can save some money, consider working a few years longer to give yourself more options. Or, cut down your hours and semi-retire. Other options are looking for part-time work or starting a home based business. Is there a way you can make money with your hobby? If you want part time work, be careful about where you retire. Make sure there is industry nearby that matches your skills, or a vibrant tourist trade where part-timers are always in demand.

10. Be positive. Maybe everything hasn’t worked out the way you dreamed it would. Keep looking for the silver lining, and don’t waste your time complaining. You’ll be happier, and so will your friends and family.

Foreclosure/Short Sale Resources:,,,,

Most Affordable Places to Retire
Most Affordable College Towns
Most Important Criteria for Best Place to Retire

What Are Your Ideas?
Please post your ideas for great retirement living on a budget in the Comments section below.

Posted by John Brady on January 4th, 2010


  1. If you’re single, consider sharing a home with a friend! Many newer homes are built with two masters,and your money will go twice as far, plus you’ll have built-in social support.

    Jan Cullinane, co-author, The New Retirement: The Ultimate Guide to the Rest of Your Life (Rodale)

    by Jan Cullinane — January 6, 2010

  2. Sounds good a small budget is exactly what I got. I have about 4 to 8 (depending on what year I decide to retire)more years before I can retire. I have a house that I hope I’ll be acle to get something out of & a vehicle that will be paid for. What I would really like to do is buy a small to medium size rv & travel for awhile but will see.:roll:

    by retirehappy — January 6, 2010

  3. Sounds like an exciting place to live. Is the price comparable to other communities in the local area? That would be my biggest concern.

    by Jose — January 12, 2010

  4. […] Resources 2010: The Best Time to Buy a Home? (MoneyWatch) Baby Boomers Face a Dilemma: Buy or Rent How to Retire in Style and on a Budget Should You Buy or Rent (Kiplingers) Posted by John Brady on May 11th, 2010 Entries (RSS) and […]

    by » Buy…Rent….or Stay? Topretirements — May 11, 2010

  5. […] The bad news is that unless you will receive a good pension, your number is probably higher than you think. The good news is that there are a number of tools and websites out there that will calculate your number for you (see list later in this article). Topretirements has other articles that will provide assistance in determining your financial needs, notably Ken Steiner’s article, “How Much Can I Spend in Retirement”, as well as “How to Retire in Style on a Budget“. […]

    by » What is Your Number? Topretirements — June 22, 2010

  6. […] Also: 11 Affordable Towns on the Waterfront How to Retire in Style and on a Budget Posted by John Brady on July 27th, 2010 Comments (0) Entries (RSS) and Comments […]

    by how to find affordable retirement | Topretirements — July 27, 2010

  7. […] For further reference: Snowbird’s Leaving for the Winter Checklist How to Find an Affordable Retirement Budget Strapped Parks Trade Retirees Work for Rent How to Retire in Style and on a Budget […]

    by » Why Your Best Place to Retire Might be… 2 Places Topretirements — April 20, 2011

  8. […] further Reading: How to Find an Affordable Retirement How to Retire in Style and on a Budget Posted by John Brady on September 29th, 2010 Comments (2)  Email […]

    by » How to Find a Second Career in Retirement Topretirements — July 19, 2011

  9. […] 6. Prepare to downsize. You should be thinking about downsizing to a less expensive and easier to maintain home. The sooner you do it, the more money and trouble you will save. “How to Retire in Style and on a Budget” […]

    by » Retiring This Year? Here Are 7 Things You Need to Do Now Topretirements — January 17, 2012

  10. Be sure your home has elements of universal design (higher counters, comfort height toilets, curbless shower, first floor master or elevator…so you can stay in your home longer.

    Jan Cullinane, The New Retirement: The Ultimate Guide to the Rest of Your Life (Rodale)

    by Jan Cullinane — January 18, 2012

  11. RV Retirement Travel … I had a good friend (quite wealthy) who did get an RV to “travel for awhile” but even for him the costs involved became prohibitive. If he had it to do over he would just travel normally getting reasonably priced accomodations as the costs for renting a place to park with electric and waste removal facilities were just as much as a bargain type hotel room. Also, maintenance/repair expense on his RV was amazingly high.

    by High Yield Consultant — January 18, 2012

  12. I have heard that when you retire you should take your old home convert it into two or more living units and rent it out. use some of that income to pay for your new place and check out where you want to live for at least a year before you buy something. That was if you miss your home town you could move back into one of your own units and still collect an income from the other or others. how does this plan sound to your.

    by Karen W — February 5, 2013

  13. Keren,

    Many areas would find the multiple units in one home to be against zoning and illegal. Check with your municipality before you pursue this.

    by Julie — February 6, 2013

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