11 Ways to Save Money in Retirement

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Retirement can be a wonderful thing, but it comes without its own set of challenges. When you no longer have the steady income of a job, it can sometimes be a struggle to make ends meet. If you’re living on a fixed income or worried about how long your retirement nest egg will last, it’s important to maintain an emphasis on saving money.

Being frugal in retirement doesn’t mean you have to live like a miser. In this article, I’ll take a look at a few ways you can save more and spend less during your golden years.

Here’s How to Save Money in Retirement

Before you can understand how to save money in retirement, it’s first important to grasp how people tend to spend money in retirement.

The Employee Benefit Research Institute crunched the numbers using data for people ages 62 to 75.

Spending CategoryPercent of Monthly Income
Health Care (insurance and out-of-pocket costs)13%

Now that you have an idea of how most people are generally spending their money in retirement, here’s how to save money in these areas.

Table of Contents

  1. Get on a Budget
  2. File for a Property Tax Exemption
  3. Pay Off Your Mortgage
  4. Downsize Your Home
  5. Find Free and Cheap Entertainment Options
  6. Use Public Transportation
  7. Pocket Your COLA
  8. Find Retail and Restaurant Discounts
  9. Get a Cheaper Cell Phone Plan
  10. Stay Fit to Lower the Cost of Health Care
  11. Shop Prescription Costs

1. Get on a Budget

Budgeting is perhaps never more important than when you’re living on a fixed income, as many people in retirement are.

Maybe you’ve never budgeted before. That’s OK: We’ve got budgeting worksheets that utilize the CLARK Method available for free right here.

If you have kids, hopefully they’re financially established, and maybe you’re even getting close to paying off your mortgage. As a result, you may find that your budget has fewer line items in it than it did when you were younger.

If you want to take budgeting a step further, try zero-sum budgeting, where you give every dollar in your life a job each month before it hits your account. That way you can seal up any small budget leaks.

2. File for a Property Tax Exemption

If you’ve reached a certain age, you can often file for a property tax exemption of some type as a senior homeowner. For example:


This is just a small sample of states that offer some kind of tax exemption for senior homeowners. A more comprehensive list is available here.

The reality is property tax law varies widely by state. Be sure to check your state’s department of revenue to see what’s available and what you have to do to qualify.

3. Pay Off Your Mortgage

Paying off your mortgage has psychological as well as financial benefits, according to financial advisor Wes Moss.

“In my book, You Can Retire Sooner Than You Think, I conducted a study of more than 1,350 retirees across 46 states to see what makes the happiest retirees. One of the main recurring themes was that the happiest and most successful retirees had either eliminated or dramatically reduced their mortgage payment before pressing the retirement button.”

Maybe you’re in or nearing retirement and you’re going back and forth about whether you should or shouldn’t pay off your mortgage. Moss has a rule of thumb about when it’s acceptable to pull the trigger:

“My advice is to follow the one-third rule,” he says. “If you can pay off your mortgage using no more than one-third of your non-retirement savings, consider paying off your mortgage — today.”

4. Downsize Your Home

Another great strategy that retirees can use to reduce the burden of housing costs in their lives is to downsize.

Once you become an empty-nester, is it really necessary to have a three-to-five bedroom home anymore? The answer for a lot of folks is no.

Again, Moss has some words of advice to impart before you consider downsizing:

“If you are planning to move while in retirement, be sure that you can move into a new home without having a mortgage — essentially swapping your current home equity (or paid-off mortgage) for a home owned ‘free and clear.'”


5. Find Free and Cheap Entertainment Options

Want to really reduce the entertainment line item in your monthly budget? Then you should search out free and cheap entertainment options!

Finding free or cheap events is easy. Some of the fun, free activities you’ll get leads on:

  • Volunteer opportunities
  • Geocaching
  • Potlucking
  • Crafting
  • Scrapbooking
  • Time capsuling
  • Free workout apps

In addition to these opportunities, some of the companies you do business with may offer free admission to fun events, too.

For example, Bank of America’s Museums on Us program gives its customers free admission to museums coast-to-coast on the first full weekend of every month.

6. Use Public Transportation

The average annual cost of vehicle ownership is $10,728, or $894 a month, according to the latest research from AAA. If you can give up your vehicle and get by with public transportation, that’s a huge chunk of change back in your wallet.

In some cases, people in retirement may not be able to drive, which makes public transportation a real lifeline. Plus, you can often get a senior discount on fares. So no matter how you look at it, public transportation is a no-brainer when it comes to saving money in retirement.

Of course, public transportation may not be a viable option if you don’t live in a metro area. For those in suburban areas, other more viable options that could still save you money may include ride-hailing services like Uber or Lyft.

7. Pocket Your COLA

If you’re already collecting your Social Security benefit, you probably know you get a small bump in your monthly check from year to year in most years.

This cost of living adjustment (COLA) tends to be somewhere in the 1% to 2% range. Essentially, that usually works out to be a boost of about $20 to $30 in your monthly check.

If you follow our advice in Step #1 of this piece — Get on a Budget — next year’s COLA could very well represent extra money that you could save each month!


8. Find Retail and Restaurant Discounts

The neat thing about senior discounts is you don’t necessarily have to be a senior citizen to get them!

Here’s a small sampling of some deals available through AARP as of April 2023:

  • Carrabba’s Italian Grill: 10% dine-in service.
  • Proflowers: 25% off sitewide.
  • UPS: 5% off shipping.

In addition to those offers, we’ve got a list of 30+ senior restaurant discounts that you may want to check out. Again, some of these “senior” discounts are available starting at age 50!

And it almost goes without saying that the best way to save money on food is to cook and eat at home as much as possible.

9. Get a Cheaper Cell Phone Plan

How much are you paying for cell phone service? If you’re just going along with the same old cell plan you’ve had for years, the answer is probably too much.

Some carriers offer affordable plans specifically for people who are 55 and older. We’ve got a full run-down of options in our best cell phone plans for seniors guide.

And while great age-specific deals exist, there are even cheaper options. If you’re focused on price, you can find plans for just $10 a month! Read about them in our guide to the best cell phone plans and deals.

10. Stay Fit to Lower the Cost of Health Care

The SilverSneakers program offers an affordable way for senior citizens to stay active. In fact, you can get a free gym membership through SilverSneakers, which is likely to be offered through your health insurance plan if you qualify.

With SilverSneakers, you get access to:

  • Fitness equipment at more than 16,000 gyms and community locations across the country
  • Group exercise classes for all fitness levels
  • Pools, tennis courts and walking tracks
  • Social networking through community events centered around health and wellness
  • Online education, including nutrition and fitness tips

For more information, read our article about the Silver Sneakers Program. We also have a list of the best free fitness apps.


11. Shop Prescription Costs

The frequency with which you need prescription drugs can go up as you age — as can the cost of those drugs.

To fight back against the high cost of prescription drugs, try using an app to help you comparison shop for the best price on your prescriptions.

Here at Clark.com, we shopped 15 of the most popular prescriptions in America across five apps. The results were clear: RxSaver offered the cheapest price or tied for the cheapest price in 10 out of 15 instances.

And an honorable mention goes to GoodRx because they alone identified free drug offers at nearby pharmacies. You can see the full results of our in-depth survey here.

We also have been hearing good experiences about Mark Cuban’s Cost Plus Drugs.

Final Thought

It can be easy to save money in retirement if you know how to get started. And without the distractions of work and a young family, you can really focus on becoming mindful about how you spend your money in your golden years. Maybe you’ve even come up with some creative ways to save money in retirement on your own. If so, we’d love to hear from you!

Have even more ideas about how to save money in retirement? Please share them in our Clark.com Community!

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