When a new client walks into a financial advisor’s office, the first conversation isn’t usually about hot stocks. When I was a financial advisor, one of the first conversations I had with my clients was about leaks.
Advisors know the ugly truth: Most retirees aren’t broke because of a bad market year. They’re slowly bled dry by autopay charges, “just in case” insurance, and habits left over from their working years.
The good news? A surprising chunk of those expenses can disappear tonight. Here are 12 things a sharp advisor would cancel before lunch on your first day as a client.
1. The whole life insurance policy you don’t need anymore
Whole life insurance is sold as protection, but for retirees with grown kids and a paid-off house, it’s often just an expensive habit. Northwestern Mutual notes that a $500,000 whole life policy can run between $542 and $708 per month depending on the buyer.
That’s thousands a year for a death benefit nobody’s depending on. I tackled this exact dilemma years ago in an advice column on dropping a whole life policy, and the math hasn’t changed. A fee-only advisor will usually look at the cash value, the surrender options, and a 1035 exchange — then help you redirect that money somewhere it actually grows.
2. Disability insurance you can’t even use
Disability insurance exists to replace your paycheck. Once you stop earning a paycheck, the math falls apart instantly.
Yet plenty of retirees keep paying premiums out of habit. As we’ve pointed out before in “10 Dumb Ways Retirees Blow Their Savings,” it’s a waste to insure income you no longer earn.
3. Extended warranties on everything you own
Advisors hate these, and Consumer Reports has been hammering the point for years. Their reporting found that retailers keep 50% or more of what they charge for these contracts, which is why cashiers push so hard at checkout.
Worse, Consumer Reports notes that consumers may overpay for extended warranties because they overestimate the likelihood that a product will need a repair. The smarter move is self-insuring with a small repair fund.
4. Stacked streaming subscriptions
Most retirees signed up for Netflix to watch one show, added Hulu for another, then forgot about both. Advisors love killing this category because the savings hit immediately.
A rotation approach works: Keep one service, binge what you want, cancel, then rotate to the next. You get the same content for a fraction of the price.
5. The gym membership you haven’t used since last year
Be honest with yourself. If the gym bag is gathering dust, that $40 to $60 a month is just penance.
Many Medicare Advantage plans now include SilverSneakers, which offers free fitness center access. Why pay twice for something you’re barely using once?
6. Identity theft monitoring you’re already getting free
This is the classic “accidental duplicate.” Your bank likely offers free credit monitoring. Your homeowners or auto insurer may include identity restoration. Your credit card company probably alerts you to suspicious activity.
Paying a third-party service $15 a month on top of all that is just buying the same peace of mind three times.
7. Premium credit card annual fees you stopped earning back
That $550 travel card made sense when you were flying for work twice a month. Now that your biggest trip is to visit the grandkids, the fee is pure waste.
Advisors run a quick math test: Do the rewards you actually use exceed the annual fee? If not, downgrade to the no-fee version of the same card. Most issuers allow it without closing your account or dinging your credit.
8. The storage unit holding stuff you’ll never touch again
This is one of the most common advisor cancellations, and it stings because retirees know it. In a Money Talks News reader survey featured in “8 Expenses That Retirees Regret Not Cutting Sooner — and Why,” one reader said she could have saved about $2,600 if she’d cut this expense sooner.
If you haven’t opened the unit in a year, you don’t own that stuff anymore. The storage company does. You’re just renting it back.
9. The second car gathering dust in the driveway
When both spouses worked, two cars were a necessity. In retirement, schedules are flexible enough that one vehicle usually does the job.
The Bureau of Labor Statistics reports that older households spend an average of $9,033 a year on transportation, as covered in our breakdown of how much the average retiree spends in a month. Drop a car and you can shave thousands off insurance, registration, gas, and maintenance overnight.
10. Brand-name prescriptions when generics exist
This isn’t about cutting medication. It’s about cutting the markup. The FDA requires generics to contain the same active ingredients at the same strength as their brand-name versions, often at a fraction of the price.
A good advisor will ask if you’ve reviewed every prescription with your doctor or pharmacist. One conversation can quietly save hundreds a year.
11. The landline you only use for robocalls
If the only voices on your home phone are scammers pretending to be Medicare, it’s time. Cell coverage has caught up, and most retirees already pay for a smartphone they use far more.
Cancel the landline and you’ll cut a bill and a daily annoyance in one move.
12. The financial advisor charging 1% on money that doesn’t need managing
Here’s the irony. The smartest advisors will sometimes fire themselves — or at least their fee structure. AARP reports that investment advisors typically charge an annual fee based on the amount of money they manage; 1% of assets is common.
On a $500,000 nest egg, that’s $5,000 a year, every year. If your portfolio is mostly index funds and you don’t need active management, a flat-fee or hourly advisor can do the same work for a fraction of the cost. AARP’s reporting also notes that some planners charge $150 to $400 per hour instead.
While you’re auditing the big stuff, also take a look at our list of 5 things you should almost never buy in retirement — there’s overlap worth catching.
The bottom line
None of these cuts will make you rich overnight. But add them up and you’re easily looking at $5,000 to $15,000 a year that stays in your account instead of leaking out.
That’s the difference between a retirement that runs out and a retirement that lasts. Cancel the leaks first. Then worry about the markets.
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