The best thing for you to live on your social security income is to wait to claim your benefits in their ripest form. Waiting means you get a bigger pay each month, thereby increasing the amount of money to spend.
If you have gotten full retirement age between 66 and 67, you can access 100% of your benefits. For each year after that till age 70, your benefits will be increased by 8%.
One can live comfortably on social security alone, and that feat is accomplished by many retirees yearly. Even if the lifestyle associated with social security income isn’t exactly luxurious, it can be decent for anyone.
The advice from financial experts is that you need to have close to a million dollars to enjoy your retirement. But let’s face the fact, most Americans don’t have up to a million dollars. So these are the means for you to have a comfortable retirement with only your social security income.
Wait till full retirement age before getting social security income
The best thing for you to live on your social security income is to wait to claim your benefits in their ripest form. Waiting means you get a bigger pay each month, thereby increasing the amount of money to spend.
If you have gotten full retirement age between 66 and 67, you can access 100% of your benefits. For each year after that till age 70, your benefits will be increased by 8%.
Share housing
You have probably seen the popular 80s TV show “The Golden Girls,” they had a great idea. When you start pooling all of your resources in retirement, you can live a lot better. When two or more individuals reside together and share the household expenses, you can save more, whether renting or sharing a mortgage payment.
Consider relocating
Where you reside determines the cost of living and household expenses. Experts say you should not spend up to 1/3 of your income on housing. The sale of a home in an expensive town or state could buy you a new home in a modest place plus a little money left over.
Also, if you reside in a place where the cost of goods and services is high, consider relocating to a place where goods and services are more affordable. But of course, there is a lot more to consider here in terms of schools, jobs, commute, safety, and such.
So as a compromise, consider a central place in a rural-urban area or an outskirt rather than an entirely urban area.
Live somewhere with a temperate climate
The heating and cooling of homes are expensive. Utility or electricity bills –Â especially in the unbearable heat of the summer and the worst of the winter – can be indefensible on the very tight budget gotten from living on your social security income only.
Living in a more temperate region or town means less demand on the HVAC unit, one of the leading expensive systems in any home, thereby reducing your bills.
Pay your debts before you retire
Before you reach your retirement age, the less debt you owe, the better. The idea of paying off all your debts entirely isn’t quite possible for everyone, but the less debt you owe, the easier it will be to survive only on a social security income.
This also applies to credit cards as much as your home or vehicle. A Planner will let you see what happens to your finances with and without debts.
Cut transportation costs
Transportation costs more than healthcare in retirement. It is one of the costs often underrated. According to research carried out by the American Automobile Association, in 2016, it costs, on average, $8,559 per year to own and operate an average sedan.
You and I both know that $8,559 is hardly affordable on social security income alone. To reduce transportation costs, you can walk or bike (if possible), use taxis, uber, public transportation, or enroll in car share if available in your area.
Prioritize
Without any other source of financial support, living on your social security income alone may make it difficult to do everything you want. However, retirement allows you to take stock of what you have and what you want. You will need to prioritize your wants.
Once you have written out what is most important to you, you can set goals and figure out how to achieve your number one priority and put it into motion.
Plan
It is very important to get a clear understanding of exactly :
- How you earn or will be earning
- How much you are spending or will spend in retirement
- Any financial asset you have and how you can use it in retirement
You should consider your finances both now and in the future. A simple retirement calculator will be able to give you quick answers. Better still, use a planner to create a detailed and long-term plan for your financial future.
Cut expenses
The first step in cutting expenses is keeping a record of expenses, which is made easier thanks to technology. Try keeping records of every dollar you spend in a notebook, spreadsheet, software program, or on your phone.
Most people are surprised by how little things add up during a month. By documenting your expenses, you will see which expenses can be cut and which are needed.
Stay healthy and make good insurance choices
Most retirees spend their lifetime on expensive and over-the-top healthcare costs, more than their social security income. There is a lot you can do to cut that expense; some ways are by staying healthy, which is done by exercising regularly, eating good food, and carefully choosing supplemental medicare coverage.
Shopping around for the best and cheap supplemental medicare should be done every year. Plans change and your health also changes.
Conclusion
By following the tips pointed out in this article, you can retire and live comfortably on social security alone. This means you don’t need to have huge savings in the bank or a retirement plan before you can retire. In addition, you don’t need to worry about not having a source of income that you could rely on.
All you need to do is take note of the ideas discussed, and you will find out that your social security alone is enough to live on.
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