Happy 2015!

Many of you are headed into the New Year with a list of resolutions to improve your life.  If some of those resolutions are financial in nature, they undoubtedly have to do with saving more and spending less.

Such fiscal good intentions may be just fine for those in the prime of their working years, but do they make sense for retirees?  After all, most retirees are no longer in a position to save more if they no longer have regular, rising incomes.  And as for spending less – how is that really possible with the cost of living going up each year?  Even if the Bureau of Labor Statistics reports that inflation is negligible, it doesn’t feel that way to many retirees, given their greater consumption of medical and support services than other age cohorts in the population.

I would recommend that retirees throw out the usual playbook for making financial resolutions, and take a different tack altogether.  In fact, I would recommend that they resolve to spend more.

Yes, retirees: It’s time to take your spending to a whole new level!

But before all you retiring baby boomers call VISA to up your credit limit, or order that little red convertible you’ve always wanted, there’s one small clarification that needs to be made. By spending more, it’s not necessarily money that I’m talking about.  Rather, it’s a resource that most retirees have in abundance, much more so than the working guy or gal.

That resource is TIME.  After all, isn’t this what retirement is all about: having the time to spend as we wish?  And given the old rule that time is money, doesn't this mean that in retirement it is still possible to use time to make ourselves financially better off?

With that logic in mind, here’s some great time-spending resolutions for retirees that can add to, rather than subtract from, their financial security.

  • Spend time creating a detailed budget.  Budgets are one of the first casualties of the fast paced, no-time working life. Now that you have some time back, use it to look closely at your sources and uses of money.  This exercise virtually guarantees that you will find money you did not know you had.  Start with your discretionary spending. “There’s gold in them thar hills!”  In other words, find expenses that can be cut without any real sacrifice in the quality of your life. 
  • Spend time learning more about your neighbors and your community.  Building these relationships creates social capital that can keep you healthy and well-provided for, particularly in times of stress or crisis.  Find ways to give to others, such as offering your professional expertise or willingness to be the neighborhood watcher now that you can spend more daytime hours at home.  You may find in return that services you would otherwise pay for, such as shoveling, raking leaves, or calling a taxi to get you home from a medical procedure, are now done freely for you. 
  • Spend time getting more tech-savvy. Age is no excuse for not getting online. Who better to benefit from the speed and volume of information that the computer age makes possible than those of us who are getting (just a bit) slower, and whose own memory storage is at capacity?  Learning your way around the internet, along with all the tools and apps that are available, can be tremendously beneficial for managing and tracking your personal finances, not to mention finding great deals on Groupon. 
  • Spend time marking time.  In other words, set up a calendar with the important financial dates for retirees, and put automated reminders into your computer.  If you are drawing from your own savings for your retirement income, you’ll want to note the dates your quarterly estimated taxes are due.  You’ll want to note all the important windows for enrollment in various parts of Medicare, such signing up for Parts A and B sometime in the three months before or during your 65th birthday month, or buying or switching your Part D drug plan between October 15 and December 7 each year. And don’t forget reminders for your required minimum distributions from your qualified retirement plans once you hit age 70½.  Missing any one of these dates can be costly and burdensome. 
  • Spend time on your financial planning.  Tax planning, in particular, is of particular importance to retirees, who are in a unique position to realize some significant tax savings.  Because retirees have more flexibility over when they realize income – for example, by accelerating or delaying distributions from their retirement accounts – they can take advantage of “tax timing” strategies, such as pushing more income into years when they have other losses or high deductions, or delaying income in years when they are in danger of surpassing a key adjusted gross income level, that would in turn subject them to higher or additional taxes.  Estate planning, too, deserves careful attention during the retirement years, as retirees naturally focus on the legacy they wish to leave behind. 

But above all, as a retiree, resolve every day to spend time like there’s no tomorrow, and you will find retirement to be the richest time of your life.