In a nation obsessed with everything “biggie-sized,” the thought of downsizing holds as much appeal as a root canal.

We just love big things. Texans boast about the size of their state, but Alaska has bigger bragging rights, at more than twice the size of the Lone Star state. Even our national monuments speak volumes about our size-consciousness. Think Mount Rushmore: The colossal sculptures of the four presidential busts are 60 feet tall.

So to suggest that we trade in a Cadillac Fleetwood for a Smart car or move from a five-bedroom Victorian into a two-bedroom condo (sans garage) is akin to cultural heresy.

But for many retirees, downsizing isn’t an option — it’s a necessary survival strategy that could stretch your savings to the end zone of retirement. All it takes is one or two unfortunate life events to throw one’s retirement plans into a tailspin.

Cut the clutter
Consider these tips to trim the fat from your budget and boost your bottom line.
  1. Shrink your domicile
  2. Donate and deduct
  3. Curb communications
  4. Chuck the extra car
  5. Strip insurance
  6. Get out of town
1. Shrink your domicile

Less is more when it comes to your home.

“Housing is the biggest area to save money,” says Certified Financial Planner Connie Stone. The Ohio-based financial planner with Stepping Stone Financial in Chagrin Falls says downsizing your home also brings the added benefit of reducing maintenance requirements — especially if you own a lot of property.

“I have a number of clients who own one- to three-acre lots and they’re saying it’s too much maintenance for them to do in retirement,” she says.

Stone advises her retired clients to get into a smaller place with less upkeep.

Another advantage of downsizing into a smaller home is the savings on taxes and insurance.

“That can have a big impact on cash flow,” says Bill Howell, a Certified Financial Planner and certified public accountant who heads Howell Financial Advisors in Noblesville, Ind.

Howell says he recently advised a newly widowed client to move from the large house she shared with her husband into a smaller one to lighten the mortgage and tax load.

“She’ll still have a mortgage, but the monthly payment will be reduced by about 25 percent and the taxes in her new community are significantly less,” he says.

Despite the general savings that come along with downsizing a home, many people are still reluctant to do it.

“Most retirees have an emotional attachment to their house and most want space for their kids to visit,” says Stephen Horan, a Chartered Financial Analyst and head of private wealth and investor education at the CFA Institute in Charlottesville, Va. “But if you can downsize and free up capital to reinvest into your retirement portfolio, that can be a very sensible thing to do.”

Some retirees find the social interaction available at retirement communities attractive. Many communities offer apartment-style homes with one to three bedrooms.

Stone suggests shopping for a retirement community that provides bundled services such as meals and laundry. She also recommends that you visit several communities and talk to residents to get a feel for the environment.

One of her clients recently moved into an apartment at a retirement community because she felt lonely and didn’t want the upkeep associated with a larger condominium.

“She absolutely loves it because now she has a smaller home and she has fixed costs for her meals,” she says. “Her grocery bill has been cut by two-thirds because she only has to make breakfast and lunch.”

2. Donate and deduct

When having a garage sale is not in the cards, donating to charity can be an excellent way to get rid of excess things in your home, help others in need and get a tax write-off.

If you downsize into a smaller home, chances are you’ll have to get rid of a lot of stuff. Donating extra tools and furniture to charity can get you a decent tax deduction, but always make sure to get an itemized receipt.

“I would get written documentation and take photographs to back up that it’s in good condition,” says Certified Financial Planner Connie Stone.

Such documentation can be important if the IRS has questions at a later date. IRS rules for donations have become stricter in recent years.

In addition, retirees typically don’t need as much clothing as people in their working years and they tend to dress more casually.

Stone says donating suits and dresses can net “hundreds, even thousands of dollars” as a tax write-off as long as the clothes are in good condition.

The IRS limits you to a deduction of between 30 percent and 50 percent of your adjusted gross income, depending on the type of property donated. The receiving organization must also be a charity under code section 501(c)(3) for your donations to qualify as a tax deduction.

3. Curb communications

Communications is an area where seniors can really cut back.

“I think the first thing most people should look at nowadays is how much they’re spending on things like cell phones, land lines, cable TV and Internet,” says Henry “Bud” Hebeler, author of “Getting Started in a Financially Secure Retirement.”

Hebeler says eliminating land lines and premium cable channels can save you a bundle over the course of a year.

Many retirees have cell phone contracts with way too many minutes, says Certified Financial Planner Kevin Reardon of Brookfield, Wis.-based Shakespeare Wealth Management.

Re-evaluate how you’re using your phone and “ask yourself if you really need 1,000 minutes per month,” says Reardon. Voice over Internet protocol, or VoIP, may be a viable alternative to your land line, he adds.

“You can get it through cable or a Vonage-type provider,” he says. And it’s usually a lot cheaper.

4. Chuck the second car

Selling that extra vehicle wrapped in the car cover seems like an obvious way to save some money. But parting with old Betsy can be painful for some.

“There is some ego involved in this,” CFP Connie Stone says. “Some people can get past it, some people can’t.”

Depending on the age, model and condition of your car, you could net several thousand dollars that can go into a savings or investment account. Check Kelley Blue Book, Edmunds.com and other reliable sources to determine a good selling price.

By selling the extra car, you’d also save on insurance and gasoline.

Evaluate your driving needs and decide whether a less expensive car can accomplish the same thing as a luxury sport utility vehicle.

“Instead of spending $35,000, you can spend $15,000 on a decent car that will get you from point A to point B,” says CFA Kevin Reardon.

It’s an issue of budget and willingness to downsize.

“Cars today can go 12 to15 years if cared for properly,” Reardon says.

Stone says to find a reputable used car dealer if you can’t afford a new car.

“As long as you’re buying a quality car that’s been checked out and has a warranty, that’s one way of saving money,” she says.

5. Strip insurance

In addition to chucking auto insurance for the superfluous car, there are other types of insurance you may be able to ditch.

Life insurance for most people is not an investment tool, CFA Stephen Horan says.

“What it’s good for is covering your family to replace income, if you die, that you would have otherwise earned,” he says.

If you have a family with kids, it averts the disaster scenario, he says. But if you’re retired, your kids are likely grown and productive members of the work force — and no longer dependent on you.

“Once you’re retired, you really have to ask whether you need life insurance,” says author Henry “Bud” Hebeler.

Investing in a cash value policy shouldn’t replace a savings strategy. If you’re retired, it probably makes more sense to buy a term insurance policy to protect your spouse, although some advisers do recommend a combination of the two for pension maximization purposes.

CFP Bill Howell says he was able to free up thousands of dollars by converting a client’s individual life insurance policy into one that satisfied the long-term needs of both spouses.

6. Consider moving on

Contrary to popular belief, most Americans choose not to move when they retire — 90 percent of the 60-plus population stayed in the same house or county, according to an AARP analysis of the 2000 census.

But moving to an area with a lower cost of living can be prudent. Consider downtown, or an area with cheaper taxes.

CFP Bill Howell says he sees more retirees moving from northern states to the Carolinas, Georgia or Tennessee, where taxes are generally lower.

Bankrate’s State Tax Roundup enables you to research target states to find those that are retirement-friendly.

Some retirees are finding small- to midsized cities attractive enough to ditch their cars altogether in exchange for the cultural advantages of urban life. An added health benefit is you can walk to most major attractions.

“I think you’re going to see a lot more older people moving into urban areas where public transportation is available and the kinds of stores and things you need are readily available, too,” says author Henry “Bud” Hebeler.

CFA Kevin Reardon says many of his retired clients are enjoying the revitalization of the Milwaukee area and are moving back into the city to take advantage the arts, dining and public transportation.

College towns also draw retirees. CFP Connie Stone sees a trend with some Cleveland-area retirees who are moving into places like the University Circle district near Case Western Reserve University in Cleveland. One benefit is that seniors can often sit in on classes at a significant discount, she says. For example, Case Western charges seniors only 10 percent of normal tuition to audit a class.

“I know a lot of people who do that,” she says. “They take advantage of all those cultural events and have virtually no transportation costs because they can walk or take public transportation.”

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