Come sail away? These Australian grandparents booked 51 back-to-back cruises and claim retiring at sea is cheaper — but here are 3 ways to stay afloat if you want to retire on land

Cut your housing costs

There is something to be said for the Ansen’s retirement strategy. Cruise ships offer many of the essential elements older people need to thrive — and they can cost as little as $89 per day, Tara Bruce, a consultant at Goodwin Investment Advisory Services, which helps people to retire at sea, previously told CNBC. Meanwhile the median daily cost of living in a retirement home in the U.S. is $156, according to Genworth Financial’s 2023 survey data from the National Senior Living Cost Index.

Back on U.S. soil, housing costs — including your mortgage, rent, property tax, insurance, maintenance and repair costs — are typically the largest recurring financial burden on retirees. But there are ways to relieve this financial stress.

Decluttering your home and keeping up with preventative maintenance can help stave off bigger problems that will bite into your retirement budget. You may also want to consider shopping around for cheaper home insurance or investing in smart upgrades for your home (if you plan to stay live out your retirement years there) to qualify for thousands in tax credits and rebates offered by the Biden administration’s Inflation Reduction Act.

Retirement is often considered a great time to downsize your living situation. Selling your family home and moving to a smaller house that is more suitable for your needs (and easier to clean and maintain) is a great way to boost your retirement budget. Not only will you save on property taxes, maintenance and utilities, but you could also unlock a pile of equity from selling your old place.

When you downsize, you may want to look at moving to an area with a lower cost of living so that your retirement savings will stretch further. Some of the best states for retirees — based on analysis of overall affordability, health care, quality of life, crime rates and weather — are Florida, Iowa, Virginia and Missouri.

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Having a single loan to pay off makes it easier to manage your payments, and you can often get a better interest rate than what you might be paying on credit cards and car loans.

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Be prepared for health care expenses

While you might have a clean bill of health when you retire, remember that no one is immune to unexpected health emergencies — and they can get very expensive, so it’s important to do everything you can to prepare yourself and your finances.

Data shows millions of Americans don’t have an emergency fund to dip into should something go wrong with their health, car, home or family. Experts like Suze Orman say making sure you stash money away today is the only way to avoid financial ruin.

As for health insurance, Medicare benefits, or “free” health care plans, kick in when you reach 65. But remember, Medicare coverage through Part A (Hospital Insurance), Part B (Medical Insurance) and Part D (prescription drug insurance) may not cover all your medical needs, so you should plan for some out-of-pocket expenses.

It is also worth paying attention to your medication costs. Americans pay higher prices for prescription drugs than any other country in the world. Since President Joe Biden signed the Inflation Reduction Act into law last year, Medicare has been able to negotiate lower prescription drug prices for seniors, helping retirees to save millions of dollars in health care costs.

But you can also take this into your own hands. For instance, if you opt for generic drugs instead of name brand medication, you could save up to 85%, according to the U.S. Food and Drug Administration.

Save now to live better later

If you’re fast approaching your golden years and you’re not confident in the size of your nest egg, there are several things you can do to secure your retirement.

Tax-friendly investment vehicles like a 401(k) account or an individual retirement account (IRA) are great tools to help you get ahead.

A 401(k) allows you to steer a portion of your pay into an account where you can invest and grow your money — and get a tax break. If you are still working, make sure you take advantage of any contribution matching available from your employer, which is about as close as it gets to free money.

In 2023, you’re allowed to contribute up to $22,500 in a 401(k) and up to $6,500 in an IRA.

With a traditional IRA, you can contribute pretax income where it’ll grow tax-free until you start making withdrawals in retirement. Another option is a Roth IRA, where your contributions are taxed upfront so that your withdrawals are tax-free in retirement.

Once your retirement nest egg is secure, you can manage that money with tried and true budgeting techniques to keep your finances on track. For instance, multiple experts tout the classic cash stuffing method — where you withdraw your allotted money every month and sort it into envelopes for different expenses and goals — can help you stop your retirement spending from getting out of hand.