Changes in the stock market affected retirement incomes and caught some seniors by surprise.

PHILADELPHIA PA – Last year’s stock market decline took its toll on many Americans, but those in retirement were among the most affected. After saving diligently for years, many believed they could safely enjoy their post-career years. Market losses, however, ate into their portfolios and put an end to those assumptions.

If your nest egg took a hit, the Philadelphia-based Pennsylvania Institute of Certified Public Accountants (PICPA) offers some advice on the best ways to stretch your dollar in retirement.

Cut Back to Necessities

Tight finances call for smart spending cuts. Many actions broadly apply to any consumer, including skipping takeout or restaurant meals, carpooling, and forgoing vacations.

Many people who are in or approaching retirement will purchase, or have purchased, a second home in a dream location. It may be a good idea to look into selling that property or renting it to generate cash. Also, downsizing to a smaller residence will both cut down on expenses and require less time and money on maintenance than a larger residence would. A downsized home may even be better designed to deal with physical and mobility challenges a retiree might encounter in the future.

Finally, make sure you take advantage of the many senior discounts available on items ranging from transit fares to movie tickets.

Adjust to Your New Situation

Despite the bad news of financial losses, your expenses may drop too because of your change in position. For example, your tax situation may have changed if your income or assets declined.

Consult with a qualified adviser to determine if you should be paying less in taxes. If you have children in college, find out whether your changed circumstances qualify them for greater financial aid or better deals on student loans.

Consider the Equity in Your Home

Tapping into your home’s equity can be a great source of cash, especially if you have lived in your house for many years and do not have an existing mortgage. If you are carrying debt because of a financial reversal, a home equity loan will likely have a lower interest rate than credit card balances, and the interest you pay may be tax-deductible. Shop around to find a second mortgage or home equity line with the lowest interest rates and fees.

Do not squander your home equity unless you truly need it or plan to use it for a worthwhile purpose.

Branch Out in a New Direction

More people in their 60s and older are staying in the workforce. In fact, by 2016, workers age 65 and older are expected to account for 6.1 percent of the total labor force, up from 3.6 percent in 2006, according to the U.S. Bureau of Labor Statistics.

If money is tight, it may be time to join those of traditional retirement age who continue to work full or part-time. It’s a great way to supplement your income and you might find a new interest or social circle through your new job.

Reconsider Your Money Management Choices

No matter how your current cash crisis occurred, you’ll want to take steps to ensure it doesn’t happen again. Now is a good time to create a new budget and research investment options to see if you are on the best financial footing. If you are unsure about how to proceed, a local certified public accountant may be able to  help.

Editor’s Note: This article was prepared by the American Institute of Certified Public Accountants (AICPA), and reviewed and distributed by the Philadelphia-based Pennsylvania Institute of Certified Public Accountants (PICPA). To find a CPA in Lower Pottsgrove or Limerick (PA) townships, the borough of Pottstown, or elsewhere visit www.IneedaCPA.org.

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