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6 Costs to Cut in Retirement

Sienna Kossman

If you don't have a traditional pension or large nest egg, it's likely that you will need to closely monitor your spending in retirement. "[Retirees] don't just sit around eating bonbons and living off pension plans," says Bart Astor, author of "AARP Roadmap for the Rest of Your Life: Smart Choices about Money, Health, Work, Lifestyle, and Pursuing Your Dreams." "At 50 or 60 years old, you still have to be thinking long-term. You will be without a major career for 30, 40 or even 50 years, which is probably longer than you actually worked before. Look at what you can afford to do, and balance it with what is important to you."

One of the simplest things you can do to make sure you stay financially viable during retirement is pay attention to your spending. "It is important to understand exactly where your money is going and what you are getting for it," says Keith Green, president of The American Retirement Initiative. "There are a lot of ways to cut spending on things you just don't need."

Whether you are in the midst of retirement or you are just planning ahead, consider cutting back in the following areas to prevent unnecessary expenditures and financial worries down the road:

Credit cards. As you move into retirement, you will likely have to adjust to living on a lower income. To avoid getting into trouble later, make sure you are only buying what you can afford. "It's generally a mistake to carry a balance on a charge card," Green says. "The overarching thought here is that during their retirement years, folks are more likely to be living on a fixed income, and that may affect the repayment process later on."

[Read: How to Pay Down Debt While Saving for Retirement.]

This is not to say you can no longer use credit cards. You just have to approach the situation differently, and be willing to look at new offers if the fee structures and payment agreements do not match your financial abilities, Green says. If you do have credit card debt, prioritize what needs to be paid first so you allocate your money efficiently. "The best routine is to pay them off every month," says Paula Heichel, vice president of investments at Wells Fargo. "But if that is not possible, and you do have a large balance, pay the cards off that have the highest interest rates first."

Technology. Don't sign up and pay for anything you aren't going to use. "How many people watch 50 percent, or even 30 percent, of the things they pay for with cable?" Green says. Paying for cable can become a major financial drain over time. Consider slimming down on elaborate packages or turning to cheaper alternatives. "Today, you can get the content from other outlets like Netflix, RedBox or Hulu, for little to no cost," Green says.

Additionally, be realistic about your needs and wants. If you need a cellphone just for making an occasional phone call, don't purchase the latest smartphone with an unlimited data package. "You don't need to be paying for fancy phones with features or minutes you don't use," Green says.

Insurance. The older you get, the less important it becomes to focus your attention and money on life insurance plans. "In the event of your death, [life insurance pays] your dependents or those closest to you," Green says. "But when you are retired, typically the folks who were dependent on you before aren't anymore. Also, theoretically, you've had time to build up other assets so the need isn't there." That said, you shouldn't always cancel your life insurance policy because many of them have viable cash return options and could help a surviving spouse or have estate planning benefits.

[Read: 7 Retirement Decisions that Affect the Rest of Your Life.]

Travel. Travel tends to increase during the early years of retirement and taper off later on, Heichel says. If you know you are going to travel more during retirement, try to factor those costs into your retirement saving ahead of time. However, regardless of prior planning, keep costs low by adjusting your travel itinerary. Shop around for the cheapest airline seats and discounted hotel rooms.

Cars. If possible, avoid buying new vehicles. "Avoid overspending on maintenance, gas and oil, too," Green says. "There is no need to spend money on premium fuel if the manufacturer recommends regular unleaded. You can't be afraid to look around for the best deals, and haggle a bit for what you need." Individual lifestyle needs may come into play, but it is important to evaluate your transportation needs to keep costs low. "Take a step back and maybe say, 'Do we really need two cars?'" Heichel says. "Some people may need two vehicles, while others may not. It's important to examine your lifestyle needs."

Gambling. Avoid recreational activities that involve spending a lot of money and not getting much, if anything, in return. "A large percentage of lottery tickets are purchased by seniors, and it's throwing away money for everyone," Green says. "Senior citizens are also disproportionately represented at casinos."

Instead, choose activities that will improve your quality of life. "Focus on activities that help you collect memories and experiences - not things or money," Astor says. "The idea is to spend what little discretionary income you have on what is most important to you. But your income may not be on the upswing, so that means you have to be more careful."

[See: 10 Secrets of Successful Retirement Savers.]

Food. Food is a necessity that you can't eliminate, but there are steps you can take to help maintain a solid budget throughout retirement. Go for the generic or store-brand items instead of brand names. "It's the little things that add up over time but can be easily avoided," Green says. Indulging in marked-up movie theater snacks and dining at restaurants are two other things that can be cut back to save money in the long run. "Save these things for special occasions," Green suggests.

Home repairs. This may be another unavoidable area for spending, but it comes down to doing your research and understanding what you need, especially if you are not able to do the repairs yourself. "Home repair can be really expensive," Green says. "You've got to be willing to shop around and find the best deal."

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