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AARP The Magazine

Take Charge of Your Money at 70+

AARP financial ambassador Jean Chatzky has a plan for making your savings last

What We Spend

The Plan for How You Spend

1. Watch spending creep

"The biggest problem I see with people their first three to five years in retirement is that they're spending more money than they thought they would," says planner Bill Losey. Suddenly, you have Monday through Friday free. You can go out for a real meal rather than eating lunch at your desk, hop on the train and go see the grandkids, play a round of golf. And the money vanishes. So track your spending, even if you never had to before. A lavish start to your retirement can mean there's not enough nest egg left to grow to carry you through to the end.

2. Call the mover

Downsizing to a smaller, less expensive home is "the most powerfully positive thing that someone can do to improve their retirement situation," says planner Tim Maurer. This doesn't have to mean relocating across the country. Trading a high-tax school district for one nearby with lower taxes can make a substantial difference. If you're willing to go a few hours away — say from San Francisco, where the cost-of-living index is a sky-high 199, to Carson City, Nev., where that index is a below-average 99 — you can revolutionize your standard of living.

3. Reimagine your life insurance

Maybe you first bought life insurance when you had a baby. Now that baby has a baby of her own. Do you still need the coverage? If you are healthy and your obligations are behind you — if your spouse could live on the money in the retirement accounts plus Social Security if you died and the kids are on their own — drop it. If you do need to continue it, act now to extend your current policy, says the LIFE Foundation's Stephen Rothschild. The younger and healthier you are when you buy new coverage, the cheaper it's going to be.

4. Don't help your kids too much

Almost 25 percent of Americans 50 and up use credit cards to help other family members, an AARP/Demos survey says. Building debt so that your kids don't have to isn't wise. If they're struggling, refer them to a credit counselor at Both parents and grown kids are more comfortable talking to an adviser about money than to each other, according to a Fidelity study. Find one through the Financial Planning Association ( or the National Association of Personal Financial Advisors (

Jean Chatzky, AARP’s financial ambassador, is a best-selling author and an award-winning personal finance journalist. This article includes additional reporting by Arielle O’Shea.

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