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Minimalism and Retirement: Getting More From Less

December 19, 2019

Minimalism is the hot new trend among Millenials and the decluttering community around the world. Its focus is cutting down the clutter and living a materially leaner life.

But what does it have to do with retirement? Today we discuss.

Life Accumulates Stuff and Expenses

We accumulate a lot of things as we go through life. From old family heirlooms, the furniture you bought for your first house, to the things your kids left behind when they grew up and flew the coop.

But it’s not just physical items that we accumulate. Given how easy it is these days to get credit, we acquire a lot of liabilities or expenses as well.

Sage advice was to buy the biggest house you can and to buy a car on lease and get a new one every few years. A few of us followed that advice and also tacked on additional consumer debt through online shopping and Black Friday deals.

Unfortunately, these additional obligations might prove problematic as we enter retirement.

Retirement Means Less Income

For most of us, retirement means ceasing active work or at least doing less of it. Therefore a pay cut is to be expected.

The more finance savvy retirees can expect a bit of income from their investments in the form of appreciation and dividends. If you’re reading this article on our site then you’re probably in this group.

But overall, retirement probably means less income than our active working years.

Existing Liabilities Can Drag You Down

Entering retirement might not be a smooth transition when you have a ton of liabilities with ongoing monthly or yearly costs.

Handling a lot of regular payments might be tougher, especially with healthcare expenses increasing as you age. So what can you do?

Managing Your Cost of Living

Before you enter retirement, it’s a good idea to check your finances to see if everything is in order as part of your overall retirement plan. Having the same expenses with a smaller income might become problematic if you don’t attack it before it happens.

There are two ways to attack your cost of living: income and expenses.

Boost Your Income

This is a big maybe for most retirees. Most of us don’t really retire to do more active work.

An option for this though is to funnel more of your existing income into passive investments. Investment vehicles like DiversyFund’s Growth REIT don’t require you to do much of anything except putting your money in.

Reduce Your Expenses

This is a much easier way to tackle your living costs in retirement, especially if you tacked on a lot of the liabilities we talked about earlier.

Cutting down your outgoings by reducing monthly payments, debts, and maintenance costs is a fantastic way to do this because of a couple of things. Let’s face it, we can all use a little consumerism diet. You probably don’t need the latest car, the biggest house, or the flashiest phone.

And here’s where minimalism comes in.

What is Minimalism?

Minimalism is a movement towards living better with less.

“Minimalism is a tool to rid yourself of life’s excess in favor of focusing on what’s important—so you can find happiness, fulfillment, and freedom.”

~ The MinimalistsWhat is Minimalism?

It’s a phenomenon spearheaded by The Minimalists, Joshua Fields Millburn and Ryan Nicodemus, and supported by decluttering experts like Marie Kondo and the KonMari method.

And lastly, frameworks and tools like the 555 rule and the reverse-hanger method can make the process of adopting minimalism and living a clutter-free life much easier.

Minimalism and Retirement

Minimalism is a valuable tool for anyone trying to live a simpler life. But what are the benefits for someone that’s retired or close to retirement?

  1. Reduces Liabilities and Expenses
    When you cut down the number of your possessions, you have fewer liabilities. You also have lower expenses on things like maintenance, repair, and storage costs.

    Less stuff means you can downsize your house as well, which has its own set of things to think about.

  2. To Have a Smaller Footprint
    When you cut down on belongings and have a smaller house, the things you do keep are more accessible and everything has its place.

    Plus, smaller houses are easier to clean. Any homeowner knows the pain of having to clean their living space. Living in a smaller space with a lot less things means quicker cleaning.

  3. Less Stuff Means Less to Think About
    Things like maintenance, repair, storage, and making your monthly payments all occupy mental space.

    When you get rid of excess stuff, your mind also gets the decluttering treatment.

  4. You Can Actually Make a Profit
    Things like downsizing your house may net you a sizable profit which you can add to your retirement accounts.

    Other things like valuable possessions may also be sold for a bit of extra pocket money. And, who knows, you may be able to sell that Action Comics #1 you’ve been hiding in the attic.

  5. Be One of the Cool Kids
    Finally, you can humblebrag to your fellow retirees that you’re doing the ‘hip, new, trendy thing’. Suddenly you’re one of the cool kids!

Cut Down to Have More

“The more things you own, the more things own you.”
~ Chuck Palahniuk, Author of Fight Club

Amassing a large number of possessions, like a big house and fancy car, has been the American dream for a long time, but it’s not for everyone, especially if you have other intangible priorities during retirement.

People are shifting their interest more towards living a free and simple life and be more connected to the things that really matter. And who knows, you might be too.

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