Financial Tips for Retiring on a Fixed Income
March 6, 2020Jim Oswald

When we think about retirement, words like 401k, relaxation, easy living, and enjoyment often come to mind. Unfortunately, retirement isn’t always so relaxing for everyone over the age of 59. If you are living on a fixed income, trying to take it easy in the later years of life may not be so easy — but there’s hope!

Tips to Maximize Your Dollar

Breaking down your living expenses into categories is a good way to see where each dollar is going. Here are 3 basic areas where you’re likely spending money:

The Essentials

The Extras

Debt Payments

Reducing Fixed Costs

Fixed expenses — rent, utilities, medical bills, and grocery items — represent your essential needs. Here are some ideas for cutting your costs on the basics.


  • See if you qualify for a senior housing assistance program.
  • Consider moving to a less expensive rental nearby.
  • Find a reliable friend or family member to share rent payments with you.



  • Sign up for Meals on Wheels. (A year’s worth of meals can cost less than just 1 day in the hospital!)
  • Stock-up on canned or frozen items during a sale

Reducing Variable Costs

Need some ideas to minimize your extra costs like clothing, transportation, and entertainment? Try some of these:


  • Find a quality second-hand store and shop there.
  • Plan shopping trips around end-of-season sales.


  • Combine an outing with a trip to the grocery store.
  • Utilize senior discounts with transportation services like BART and MUNI.
  • Utilize Paratransit services.

Reducing Your Debt Costs

Handling debt payments with a limited income is the last thing you want to think about. Consider improving your debt situation with these practical options:

Debt “Snowball”

This is a way to knock out your debts by attacking the smallest ones first. List all your debts from smallest to largest. Each month, after paying all your required expenses (including minimum payments on each debt), put any extra income towards your smallest debt. When you’ve succeeded paying-off that debt, move on to the next largest one and keep going up from there.

Debt “Avalanche”

This strategy helps you attack debt with the highest interest rate first. List your debts in order from highest interest rate to lowest interest rate and start at the top. While this approach of paying-off debt may be slower and harder at the beginning, you’ll end up saving more money in the end.

Planning for the Long-Term

Whether you’re 55 or 85, it’s important to have an eye on the future. Here are some final ideas for arranging your finances as you move forward.

Start a Budget

After all this talk about cutting expenses and making ends meet, let’s not forget about saving money for the future. There is great satisfaction in saving up money you know you could spend but don’t actually need to spend. Start by subtracting all your likely expenses from your guaranteed income each month to see what’s leftover. Then, challenge yourself to set aside something each month ($100, $50, even $10), and try to create a habit of saving.

Find a Money Coach

Navigating financial issues can be tough if you’re doing it alone. Some folks are just really smart with money, and it’s a good idea to add them to your team. You could get advice from an old coworker, a business-minded grandson, or even hire a professional to help you with your finances. Look for someone who is willing to teach and already has their own finances in order.

Plan for a Celebration

There’s always an exception to each rule. Once you’ve put in the hard work of cutting costs, budgeting, and finding ways to save money, choose a time to celebrate the progress you’ve made. After all, enjoyment is a big part of retirement!

Photo Credit:

Ben Tejes is a writer for Ascend and Saved By the Cents, which are resources to help people achieve financial freedom.


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