Baby Boomers, the generation just starting to hit the retirement circuit, have a problem. Ongoing expenses are cutting into their retirement savings. The result: Most Boomers haven’t saved enough money in their retirement accounts to last them from the time they retire until they die. (For information on setting up a budget, see Budgeting Basics.)

The average Baby Boomer approaching retirement has about $136,000 set aside, according to a BlackRock survey. That amount will be good for little more than $9,000 per year in retirement income. Even after adding average Social Security payments of about $16,000 per year, the total of $25,000 is simply not enough annual income for most people.

If you still have a few more years in the workforce, there are ways to increase your retirement savings without increasing your income. “The first thing you need to do is prioritize retirement savings in your monthly expenses. Instead of waiting to see what you have left over at the end of the month, it makes more sense to save first, then spend what you have left over,” says Kirk Chisholm, wealth manager at Innovative Advisory Group in Lexington, Mass.

Depending on how long you have, you might be able to make up a large chunk of lost ground by cutting back on expenses alone. Here are six key areas to examine for savings.

1. Housing

Your mortgage payment is likely your largest monthly outlay. If you are eligible to refinance your home at a lower interest rate, do so and put the savings toward retirement. Four years ago, the average potential monthly savings from refinancing was $471. That works out to more than $5,600 annually.

“Refinancing your debt decreases the overall interest you end up paying on your debt. So less of your paycheck goes towards interest payments and more can go towards saving for retirement. Refinancing a 10-year note worth $50,000 from 6% to 4%, for example, creates an extra savings of $50 per month, $600 per year and $6,000 over the life of the debt,” says Mark Hebner, founder and president of Index Fund Advisors, Inc., in Irvine, Calif., and author of “Index Funds: The 12-Step Recovery Program for Active Investors.”

While you’re at it, look into refinancing your automobile, boat and student loans. Check into switching to “auto-pay” for installment loans. In many cases, agreeing to auto-pay will get you a reduced interest rate.

“Downsize your house and/or look into a reverse mortgage if you’re over age 62; the latter can eliminate your payment if it makes sense for you,” says Scott A. Bishop, MBA, CPA/PFS, CFP®, partner and executive vice president of financial planning, STA Wealth Management, Houston, Texas. “Downsizing reduces insurance, energy, property taxes – a bill even if you have no mortgage – and upkeep.” (For more, see Downsize Your Home to Downsize Expenses.)

2. Credit Cards and Other Accounts

The average household pays out $2,630 in credit card interest each year. The more you reduce this amount, the more you can put into your nest egg.

“Never roll consumer debt into a home mortgage,” cautions Michael J Eugenio, CFP®, president of Eugenio Financial, Lake Oswego, Ore. “While it might save money monthly, long term you have added an enormous amount of interest. That car payment that you had 30 payments left on, now just became a 30-year car payment.”

Instead, first ask for a credit card rate reduction. If that’s a no-go, look into a balance transfer to another card with a lower rate. Or, if you can pay off your credit card debt within a year or so, look for a card with a 0% APR for 12 to 18 months. The interest you paid can go into your retirement savings.

Use a rate comparison tool such as this one by Bankrate. And don’t just do it once; check on a regular basis. 

3. Energy

Home modifications like weather-stripping, caulking and installing a programmable thermostat can reduce the use and cost of energy. So does switching to energy-efficient light bulbs, which use two-thirds less energy and last 10 times longer than regular bulbs. 

Other energy-saving tactics include cleaning and changing furnace filters, insulating your hot water heater, sealing ducts and plugging air leaks in electric outlets. You can save even more by lowering your hot water heater temperature to 130 degrees. 

All of these strategies combined can save anywhere from 10% to 20% on utility costs. 

Compare gas and electricity prices – typically on your utility website. Most offer “apples-to-apples” comparison charts, and the savings can be significant. 

Making changes like these can result in savings of up to 30% on average household energy costs of $2,200 per year. That’s $660 more dollars in that retirement savings account. 

4. Food

On average, American families spend more than $6,000 per year on groceries. Experts say you can save up to half that amount by following the food-shopping strategies here. (That’s another $3,000 in the retirement kitty.) 

The easiest tactic is to make a grocery list and stick to it; no impulse buying. Check advertised specials and use coupons – including the electronic coupons on that convenient app your local grocery chain provides. 

Make use of loyalty cards and programs. Buy items in bulk at Sam’s Club or Costco. Buy produce in season or, better yet, grow your own.

Stockpile when items you use are on sale. Coupon matching (use of a coupon on an item on sale) can produce added savings. 

Want to save even more? Take your lunch to work (instead of eating out) and save more than $1,000 per year. Instead of that morning Starbucks, bring coffee from home or drink the free office coffee, if it's provided. There’s another $900-plus toward your retirement years. For more, see 22 Ways to Fight Rising Food Prices.

5. Transportation

Better driving habits are a good start: Slow down and you can increase fuel efficiency by up to 17%. Make sure your tires are fully inflated and fuel economy goes up another 1%. 

Remove extra weight from the trunk and back seats: Eliminating an extra 100 pounds will increase fuel efficiency 2%. 

Additional savings can be achieved by shopping for lower-priced car insurance. “Be sure to take advantage of bundling policies and perhaps raising your deductible, if that’s appropriate,” says Marguerita Cheng, CFP®, chief executive officer, Blue Ocean Global Wealth, Gaithersburg, Md. Or you could switch to ride-sharing or mass transit for all or part of your daily commute. If possible, you could consider cycling or walking to work. 

Switching entirely to public transit could save up to $9,600 per year, according to the America Public Transportation Association. Telecommuting or working from home could save anywhere from $2,000 to $7,000 per year.

6. Entertainment

A recent Bureau of Labor Statistics report said the average American spends $2,800 per year on entertainment. Cutting that in half would result in savings of $1,400. 

Cancel club memberships you don’t use and subscriptions to newspapers and magazines you don’t (or rarely) read. Alternatively, change print subscriptions to online subscriptions as they tend to be less expensive. 

Become a cord cutter and reduce or eliminate your cable bill. (Alternatives to Cable TV can help.) Visit and use your local public library, attend free concerts and other free community activities. Take short day trips instead of overnight travel.

If you’re a sports buff, attend amateur sporting events – most are free – instead of pro games. Take up an inexpensive hobby or, better yet, turn your hobby into a moneymaker. Get Ideas from Three Ways to Make Money Off Your Hobby.

The issue, says Wes Shannon, CFP®, managing partner of SJK Financial Planning, LLC, in Hurst, Texas, is “not the high cost of living, but the cost of living high.”

The Bottom Line

Based on the amounts listed here, your maximum potential savings could be as high as $24,000 per year – or even more. Your actual savings would likely be less, however, since not every option would necessarily be available to you.

If you save $12,000 per year (or $1,000 per month) and have a compounded rate of return of 6%, after five years your extra $60,000 in savings would actually have grown to $69,824. After 10 years, you would have accumulated an additional $163,264 from cutting expenses alone.   

A bonus: Thanks to tax savings, your out-of-pocket costs for those savings would not be $1,000 per month. Depending on your tax bracket, the actual cost to you could be around $700 per month (or $8,400 per year) to put away $12,000 annually.

You may also be interested in Save $1,000 a Month with Your 401(k).