If you haven’t provided sufficiently for your retirement, it is obvious you need to cut your expenses. Even if your financial planning is perfect, the loss of your regular income is likely to be a psychological shock. You can decrease this shock by reducing your spending.
- Defer any major expenditure e.g. a new house, auto, computer, or video equipment. This is especially critical if you did not expect to retire so early. It is also time to be extra vigilant if you suddenly have access to mandatory savings (e.g. 401(k) in the U.S., super in Australia, provident funds in Malaysia and Singapore).
- Be slow in adding new items of expenditure. New activities could come with new expenses. Be wary.
- Rely on your old habits of thrift.
Identify expenses connected with your working life that you can reduce: house, auto, clothes. Find ways to reduce them, including moving to a smaller house away from the city.