Living on Social Security
Nearly half of all individuals in retirement rely on their Social Security for ~90%, or more, of their income. That’s not a whole lot, and leaves many people wondering, what can they do to make their money stretch further?
When you do a quick search on Google about how to get the most out of your social security, the most prevalent answers are not exactly helpful. Pay off your debt and mortgages before you retire, don’t claim your social security before your full retirement age or put it off until you’re 70, just take a year or two break from collecting it and it’ll be even greater when you start taking benefits again. These pieces of advice are just not wholly applicable when you are already retired and relying on social security as your only means of income.
One of the best ways to avoid overspending is to know how to keep and maintain a budget. Every dollar you spend should be recorded. Know how much essentials cost you, how much you spend on non-essentials, and in general, work to keep everything balanced.
Be mindful when grocery shopping. Make a list beforehand and stick to it so you know what you which groceries you need and what items are extra expenditures. As a culture, over-snacking is rampant, cutting out excess snacks is a great way to reduce your expenses, as well as helping to keep yourself a little healthier. Of course, coupons and other deals are also a great way to save some money, but be careful. Many people fall into the trap of buying an item that they will never use, or buying bulk more than they can use. Just because you have a coupon for something, does not mean you need to buy it.
On average, the greatest source of expenses during retirement is housing. Mortgages, maintenance, insurance, etc. If finances are a concern, you may want to consider downsizing, looking for an affordable/low-income senior housing apartment or a senior living community.
The next highest cost is transportation. What can you do to cut that down? How often do you need to head out? Is public transportation a suitable option? If you only need to head out every once in a while from point A to point B, look into rideshares programs, such as Uber or Lyft, they typically run cheaper than a standard taxi fare. If you don’t need to travel much at all, consider selling off your car, no need to worry about maintenance costs or the hassle of mandatory insurance.
Utility costs are also something to look at. Heating and A/C can be really expensive in some areas. Can you get away with wearing a sweater around the house and an extra blanket at night, and have the thermostat set lower? And what about internet, cable, and phone? If you have a cell phone with satisfactory coverage at home, do you really also need a landline? Can you get away with transitioning to online TV/entertainment instead of expensive cable bundles?
There are many ways you could cut costs to keep on a limited budget such as social security. Not everything here will apply to everyone, we are all in our own situations after all. Be mindful of your own budget and your own spending, and understand what you need and what you can afford to cut.