9 Tips To Having a Comfortable Retirement on Social Security Alone
An insurance program, Social Security serves as a safety net for low-income individuals. Employees contribute to the scheme by deducting money from their paychecks. Social Security was meant to help people who don’t have pensions or savings for retirement. Nonetheless, this is no longer the case for many people. The goal for many is to be able to use Social Security as extra retirement savings and income.
According to the Social Security Administration, one out of every five married couples and one out of every two single recipients over the age of 65 receive at least 90 percent of their income from the program.¹
Having to rely only on Social Security benefits alone might be challenging. However, here are some pointers for individuals nearing or in retirement who may find themselves in this scenario.
1. Delay Taking Social Security
Of course, if you’re in poor health and don’t expect to live out your retirement years, it’s best to start collecting Social Security payments sooner rather than later. However, if you’re in good health and have other streams of financing, you may be better off delaying social security.
For people born after 1960, the age of full retirement is 67. For every year you collect Social Security payments before the age of 62, the amount you get will be lowered.²
You can put off taking early Social Security payments by working part-time or staying on your current job for an extended period after you retire from it.
Relocating to a less costly neighborhood in your present location may allow you to save money for your golden years. Moving to a new location or even moving to another country may be necessary for some instances.
It is possible to better manage your money by moving to a state where the cost of living is lower, and tax rates are more favorable.
3. Plan Ahead
Retiring does not come out of anywhere; it is a gradual process. It would help if you decided to retire far in advance of the time you plan to stop working. It implies you still have time to lay the groundwork for a retirement strategy.
Prepare an estimate of your expected retirement income and a detailed budget of your outgoings. Another important financial decision to make before retiring is to deal with any valuable assets you may have.
4. Streamline Your Other Expenses
If you’ve been able to lower your housing costs, your next move should be to reduce other expenses like energy bills, transportation costs, and food.
While you don’t have to devote your life to coupon-cutting, you should keep a close watch on your purchasing habits and the reasons behind them.
5. Get A Roommate
In a nutshell, another economic fact might be stated. Living with a roommate minimizes your financial responsibilities.
There is nothing wrong with having numerous roommates. Retirees are often advised by financial advisors to cut back on their living expenditures by doing this. The secret to surviving on a fixed income in retirement is once again to keep spending down.
6. Eliminate Debt
Regardless of your current financial status, you’ll be better off in the long run if you have less debt. When it comes to your retirement, even if you can’t pay off all of your debt before Social Security benefits begin, taking care of most of it early then can make a sizeable benefit. It is also vital to reduce debt on credit cards that charge high-interest rates.
7. Generate a Modest Profit
When you retire, you don’t have to give up your career. After leaving their retirement ceremonies, millions of seniors from full-time occupations take on part-time jobs in the workforce to supplement their income. Be aware of the financial consequences of taking part-time employment after leaving a full-time position.
8. Seek Financial Assistance
During your golden years, the government’s financial faucet is turned on in the form of welfare benefits. As a result, most seniors either do not request financial assistance or are unaware of their eligibility for such aid. Financial support in retirement can be found if you know where to seek it.
9. Keep Healthcare Costs Under Control
Having a pre-existing medical issue will necessitate having a retirement healthcare plan in place. When you turn 65, your health insurance begins to cover some of your medical bills, but it does not cover them entirely.
To pay for medical bills after retirement, especially if you only have Social Security as a source of income, you’ll have to explore outside of your insurance policy. Retiring with a healthy lifestyle might positively impact your financial well-being.
The Bottom Line
Retiring solely on Social Security is not ideal. Make the most of the time you have left until you retire and seek ways to increase your funds. When you start saving early on in your life, you won’t have to worry about how long your Social Security benefits will last.
Downsizing, relocating, minimizing expenses, managing healthcare costs, and delaying Social Security benefits can all make a significant difference if you find yourself in a position where you need to stretch your resources.