If you're approaching retirement with minimal savings, you're in good company. An estimated one-third of workers 55 and over have less than $10,000 set aside in a nest egg, according to data from GOBankingRates. Meanwhile, the Economic Policy Institute reports that the average household aged 56 to 61 has just $163,577 socked away for the future -- and that's not a whole lot in the grand scheme of what could be a 20-, 25-, or 30-year retirement.
That said, you don't necessarily need to panic if your savings are lacking; you just need to devise a plan that allows you to retire on less. Here are some avenues you might pursue.
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1. Downsize your home
It's generally the case that a smaller home is less costly to maintain than a larger one. Therefore, if you're sitting on a sizable property you no longer need (say, your adult children have moved out), downsizing it could save you a considerable amount of money on things like real estate taxes, insurance, upkeep, and repairs. Along these lines, it's also cheaper to heat and cool a 1,200-square-foot home than one twice that size, so if you don't need the same amount of space you once did, consider this money-saving move.
2. Start a business
Many people think of retirement as a time to stop working. But actually, retirement is the perfect period in your life to pursue the business venture you've always dreamed of, whether it's inventing and selling a new product or monetizing a long-term hobby. Not only can starting a business help you make money to compensate for your lack of savings, but it can save you money by virtue of occupying much of your newfound free time, thus minimizing your need to spend on entertainment.
3. Ignore those early bird specials
Of the various senior discounts out there, those related to dining are perhaps the most utilized. After all, everyone needs to eat, and it's hard to pass up that local special offering up an appetizer, entree, and dessert for a mere $14.99 plus tax. But one thing you need to realize is that restaurants typically charge an enormous markup on food, which means it's always cheaper to cook your meals at home -- even when taking early-bird offers into consideration. Or, to put it another way, if you typically spend $400 a month on dinners out, preparing that same food at home should cost you a mere $100. And that's a good way to get by on less.
4. Lower your healthcare costs
Though you may come to find that many of your living costs go down once you stop working, healthcare is the one expense that's virtually guaranteed to go up in retirement. Therefore, if you take steps to lower your medical costs as a senior, you'll help your nest egg last much longer.
You can start by pledging to never neglect your health and getting ahead of medical issues before they escalate. A nagging cough won't seem problematic until it evolves into pneumonia, but if that lands you in the hospital, your bill will be much higher than that of a typical doctor's office copay. Along these lines, take advantage of the free preventive healthcare services offered by Medicare. Once enrolled, you get a free wellness visit each year and a number of no-cost health screenings.
Finally, shop around for the best coverage to suit your needs. Since there are a number of key services, like dental and vision care, that traditional Medicare won't cover, a Medicare Advantage plan might work out better for you. Similarly, make sure the drug plan you choose offers good coverage for the medications you're on, keeping in mind that plan formulas can change from year to year.
Entering retirement with minimal savings is a daunting prospect, but it doesn't have to be. If you take steps to lower your costs as a senior and are willing to be proactive in generating income, you can make up for your limited nest egg and still enjoy your golden years to the fullest.
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