Helpful Tips for Seniors Living on Social Security Alone
No one wants to spend their golden years worrying about money. Yet, having a significant amount of retirement savings stashed away just isn’t a reality for many Americans.
An estimated 21% of married seniors and 43% of single seniors depend on Social Security benefits for 90% of their income, according to the Social Security Administration. Living month-to-month is how a good portion of seniors get by. If you are relying on Social Security alone, follow the tips below to help maximize your payout and make your funds last longer.
Claim Social Security closer to age 70. If you haven’t applied for Social Security yet, try holding off on doing so for as long as possible. The Full Retirement Age (FRA) under the Social Security Administration is 66 or 67. Start drawing on Social Security at this age and you’ll receive 100% of your benefit. Wait longer and receive an annual increase of 8% until you turn 70. If you withdraw before FRA, you’ll pay a penalty. For example, if you file for Social Security at age 62, you’ll only receive 75% of your benefit for the rest of your life. If you can’t wait until 70 to collect Social Security, aim to reach FRA.
Create a budget. When we’re younger and working, budgeting isn’t always a priority. However, as we age and rely on fixed incomes, establishing financial limits is crucial. If you’re new to budgeting, doing so can feel restrictive at first. However, managing your money is ultimately empowering. For several weeks, track your spending, or look back at previous bills and statements for credit cards, utilities, etc. Once you know your typical monthly expenses, you can budget for the future. If you need help getting started, reach out to a budget-savvy loved one or friend for help.
Spend mindfully. Once you have a budget, it’ll become easier to reduce excessive spending. Create and stick to a shopping list. Take note of any impulse items that catch your eye, but don’t purchase them. Add up what you could have spent to see how much you’re actually saving. Once you become aware of your spending habits, you’ll know precisely where your money is going and will feel more in control of your finances.
Consider a move. If living in your current area is stretching your Social Security checks too far, you may need to consider moving to a new locale. Relocating can reduce your monthly expenses and boost your quality of life. Keep in mind that some areas are more senior-friendly than others in terms of taxes, cost of housing, and convenience to shopping and transportation. Check out The 10 Best Places to Retire With Affordable Housing for locations that you might consider.
Rent out a room. Do you have empty bedrooms in your home? Sharing living space has its benefits. Not only does it reduce your living expenses, but it also protects against isolation. Ideally, you should rent to a family member or family friend. Through your local senior center may also advertise older persons who are seeking a an affordable place to live.
Sell your car. If you’re homebound and keep your car around “just in case,” it may make more financial sense to sell your vehicle. AAA estimates that it costs $8,876 annually to own and operate a car. Yearly costs include insurance, maintenance, car payments, gas, parking, repairs, and registration--all of which add up. If you can live without owning a car, you can retain thousands of dollars. If aren’t sure, try public transportation out before you sell your car. Purchase a monthly pass and ask about senior discounts to save even more money using public transportation.
Make a long-term care plan. Our health is more likely to decline as we age, but senior living facilities can be very pricey. According to a GenWorth Cost of Care Survey, a one-bedroom in an assisted living facility costs an astonishing $45,000/year on average. Luckily, there are more affordable options. Seniors whose family caregivers work may need daytime care during the week. Enter adult day care. Currently, there are over 100 adult day care centers in Maryland alone. You can expect to pay $25-$75/day, but many nonprofit centers use a sliding scale. Contact your county’s Area Agency on Aging to discover the many valuable resources available to seniors, family caregivers, and adults with disabilities.
Know your benefits. There’s more to your healthcare than being eligible for Medicare at age 65. Seniors living on a limited income can tap into a wide range of benefits. For example, as of 2018, Maryland Medicaid subscribers can access free hearing aids and cochlear implants. Visit BenefitsCheckUp for information on receiving assistance with medications, employment, housing and more.
Living on a limited income isn’t easy but there are ways to make it more manageable. At Vaughn Greene Funeral Services, we strive to provide the best support and personal attention possible to you, your family, and our community. If we can be of service in any way, please contact us.
About Vaughn Greene Funeral Services: For more than 20 years, Vaughn Greene Funeral Services has been providing a ministry of care to Baltimore’s African American community. As a leading local, minority- and family-owned provider, we promise to provide our highest level of service and respect to families who entrust us to honor their loved one. For more information, please call us at 410.655.0015 or visit us online at https://vaughncgreene.com/.