Saving & Spending Budgeting & Expenses

Retirees Should Cut These 8 Expenses To Save up to $25K a Year

Cutting $25K worth of expenses could be easier than you think.

By Michelle Smith

Edited by Lisa Dammeyer

Updated Jan. 28, 2026

After spending a lifetime building your savings, you're at the point of starting to spend them wisely. But if you're early on in retirement and already worried about your budget, some drastic changes may be needed to avoid wasting your retirement savings.

Fortunately, cutting costs in some key areas can help you put as much as $25,000 back in your wallet by the end of the year. Keep reading for our list of expenses to cut and ways to save in 2026.

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Gas and car insurance

Approximate yearly savings: $8,600

Hopefully, you spend less time commuting now that you're retired. If you live in a multi-car household, now could be the right time to cut down to just one vehicle.

According to the Bureau of Labor Statistics, the average American spent $2,411 on gas in 2024 and $1,993 on car insurance. When you add $4,206 — the average (and rising) cost of vehicle expenses like maintenance — you're looking at saving $8,600 in a year. Selling your car can give your budget an extra boost as well.

Who really has the cheapest auto insurance in your area? Check your zip code here.

New cars

Approximate yearly savings: $5,300

Thinking of trading in your household's two older vehicles for one new model? Think again. Even Americans who traded in their cars to net a lower sales price spent an average of $5,337 per household on vehicle purchases in 2024. Your retirement savings will last longer if you stick with your sturdy older car rather than upgrading to the newest model.

Eating out

Approximate yearly savings: $3,900

If you're going out to eat every few days, you're paying for more than the cost of food. You're also paying a tip, plus the cost of driving to and from the restaurant. Ordering in using a service like DoorDash is even worse, adding pricey service fees on top of your tip.

You don't necessarily need to cut eating out from your budget entirely, but you'll be surprised at how much you could save by going from several times a week to once a month.

Get a protection plan on all your appliances

Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.

Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.

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Vacationing

Approximate yearly savings: $4,000

You might have spent your working life looking forward to traveling, but the unfortunate reality is that travel can be brutal for your bottom line. According to data from the fintech company Chime, individuals spend an average of $1,991 on a one-week vacation, which includes the cost of food, travel, transportation, and sightseeing.

Cutting two weeks of vacation from your plans this year (or cutting down just one vacation as a couple) can save you as much as $4,000. If your heart is set on travel, consider other cost-cutting measures. Domestic flights cost an average of $290 per ticket, so think about driving to the closest national park and camping out instead of flying to the coast.

Interest and fees on credit card debt

Approximate yearly savings: $100

While paying off credit card debt presents a big financial lift upfront, the amount of money you'll save on interest payments once your debt is gone is hard to overstate.

Depending on your debt amount, you might only be paying $100 or so in interest fees year over year. However, a recent analysis from NerdWallet shows that making only minimum payments on the average credit card debt of $11,413 per person results in $18,500 of total interest charges until the balance is resolved.

Streaming subscriptions

Approximate yearly savings: $900

Do you feel like you need to sign up for every streaming service just to make sure you don't miss the most recent pop culture chatter? You could be so used to multiple small, recurring monthly charges that you're missing the bigger financial picture. For instance, HBO Max costs $229.99 per year; a Disney+, Hulu, and ESPN bundle costs $359.88 per year; and a premium Netflix subscription costs $299.88 per year.

Most — if not all — of the TV shows and movies on these streaming platforms will make their way to your local library eventually, where you can access them for free.

Retirement News: Almost 80% of Americans fear a retirement age increase — here’s the real reason why

Family phone plans

Approximate yearly savings: $1,880

If your kids or grandkids are included on your phone plan, it could be time to cut the cord. The average four-person family phone plan from a major provider costs $200 per month, or $2,400 per year. Cutting back to a one- or two-person plan with a cheaper carrier and sticking with your old phone as long as possible instead of upgrading to the newest model right away can help you save some cash.

Housing costs

Approximate yearly savings: $3,650

Do you need to make a drastic financial change to avoid running through your retirement savings? Selling your house and moving into a smaller rental could be the best way to keep a chunk of change for yourself.

According to the BLS, homeowners spent more than $9,000 a year on home costs, while renters spent just over $5,660. Of course, there are many financial factors to weigh when it comes to a big decision like selling your house, but if the kids have moved out and you're living in a one- or two-person household now, selling might make the most financial sense.

Bottom line

It can be scary to think about how to avoid running out of money in retirement, but a little planning can go a long way. And while carving certain expense categories from your budget wholesale will bring your spending down drastically, don't underestimate the importance of trimming small expenses, too. Every penny saved matters when you're calculating costs to ensure your savings last the rest of your life.

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