If you’re a boomer nearing retirement, no doubt you have read, watched and listened to enough about retirement income planning to probably write a book about this topic yourself. I mention that because, yes, I too am discussing retirement planning, but my info comes with a twist. Please indulge me and allow me to offer you an alternative to the usual suspects when it comes to planning for your financially secure retirement.

The Frugal Retirement Option

One of the most daunting challenges facing anyone planning for retirement is the question of how much to save. Since there’s no one answer, you look for the majority opinion. But how about considering the frugal option as well? This is indeed more of a minority view, yet it’s growing quickly as a preferred strategy for early retirement.

Here’s what I mean by the frugal option. What if instead of assuming you will need savings to cover at a minimum 90% of your current living expenses, you consider covering 50 -70% of your current expenses instead? Maybe even less if you’re at a job or in a career that’s driving you crazy.

The reason I believe the frugal option is worth considering is all about time and freedom. Are you willing to spend less in retirement if it means you’re able to reach financial independence 5 years earlier than planned? Have you been dreaming and wishing for something to happen so that you could retire earlier than planned and taste the freedom that comes with not having to work for money? 

Keep it Simple Smarty (KISS)

Retirement planning in general is a pretty overwhelming concept for most people. With all the finance jargon to deal with as well as the alphabet soup of investment options, it’s easy to say “I’ll do that retirement planning tomorrow”, which turns into never.

Instead of overloading your money circuits, keep it simple. Bottom line, you’re seeing how low your expenses can go when you’re no longer working for money. You’ll need a good 3 year average of your total living expenses, a legal pad and a simple calculator. The object here is to see what expenses are negotiable during retirement and which our non-negotiable.

Once you have what you believe is your final list complete, store it away for a month. Revisit the list the following month and see what else can possibly be cut. Repeat this exercise 6 times. Be on the lookout for a bad day/week at work and watch how many items that you categorized as non-negotiable suddenly become negotiable. (Oh, I can remember those days well…)

Living the Life in Frugalville

If you have a personal story of how you reached financial independence earlier than planned by lowering your living expenses, I’d love to hear from you.