I’m 55 and want to quit work in the next decade. Should I cut costs now with solar panels and an electric vehicle so retirement is cheaper?

Most financial experts say these moves can make sense, but only if the numbers and the timeline work in your favor.

The new retirement strategy: Shrink future bills

Traditionally, retirement planning has focused on building up a nest egg. Organizations like the AARP even offer calculators to help workers estimate how much they need to save (1). But many planners say the other half of the equation is reducing what you’ll need to spend.

Housing, transportation, and utilities are typically the largest household expenses and account for a significant share of total spending, according to U.S. consumer spending data (2). Cutting those costs before retirement can reduce the amount you need to withdraw from savings each month. Here’s what you can do.

Solar panels

Rooftop solar can slash your electricity bills, but only if you can handle the upfront cost.

According to the U.S. Department of Energy, homeowners can save money over a home solar system’s lifetime, depending on where you live, system size, and the incentives you’re eligible for (3). And the timeline is important.

If you’re planning to stay in your home long enough to reach the break-even point, the investment may eventually lower your monthly utility bills. But if you sell the house earlier, you may never fully recover the upfront cost.

Electric vehicles

Switching to an electric vehicle is another way to shrink your bills. Consumer Reports says the average EV driver who does most of their charging at home can save about $800–$1,000 a year in fuel alone compared to a comparable gasoline car driver. EVs also tend to cost less to maintain, since they don’t require maintenance like oil changes and have fewer moving parts (4).

But keep in mind that sticker prices of EV are usually higher, so the real payoff depends on how long you keep the car, what financing you are able to get (including the interest you’ll pay on any loans!), whether you are apt to use expensive rapid charging, and how much you drive each year.

Downsizing

While solar panels and EVs may take years to pay off, housing changes can have an immediate impact. Moving to a smaller home can help reduce:

• Mortgage payments
• Property taxes
• Utility bills
• Maintenance costs

For many retirees, housing is the single biggest monthly expense, so trimming it early can create some breathing room in retirement budgets. If you sell a paid-off home and buy a smaller and less expensive one, you may make money in the transaction, and you can pocket the difference or put it toward retirement savings.

When is investing in green upgrades worth it?

Let’s say Jim decides to make some of these big money-saving upgrades. He should keep in mind that life doesn’t always go exactly according to plan.

Retirement timelines can shift. Whether it’s health changes, family needs, or even housing market conditions, factors can crop up that affect how long you stay in a home or keep a car. That’s why consumer experts say it’s key to run the numbers before spending thousands on upgrades.

For example, the U.S. Department of Energy recommends that homeowners calculate installation costs, available tax credits, and what they expect to save on electricity before installing solar panels (3). If the payback period stretches longer than you expect to stay in the home, the math may not work out the way you hoped.

Electric vehicles should also be run through a similar reality check. Though charging is often cheaper than buying gasoline, the bigger picture when it comes to cost depends on how long you keep the car and how much you drive.

Experts at Consumer Reports say buyers should compare purchase price, fuel savings, insurance, maintenance, and resale value to understand the true long-term cost.